Hot water heaters are the most common items that fall into the rentals to be assumed by the buyer in residential agreements of purchase and sale. For many years, Ontario Hydro and municipal electric companies rented electric powered hot water heaters for what most people considered insignificant monthly fees. These were true rentals with no fixed terms. If you decided you wanted to own your own, you could either offer to pay the depreciated value to the power company or simply have them pull the unit and you could install your own. As natural gas reached many areas, similar deals were offered by the gas companies. However, there is a new game in town – leasing. This is the same kind of leasing that anyone who has leased a car will be familiar with – it is a form of financing with an interest component. Many new home builders have set up leasing contracts to purchase the many units that would go in a typical subdivision. The bulky new home purchase contract will require the assumption of this lease. What is shocking is that these are not rentals and cannot be cancelled without financial consequences. The leasing company’s buy out is the remaining payments of the lease plus a nominal amount for the unit. We have seen buyouts on these leases over $2500 for a unit that sells at a big box store for less than $1000. Before you assume what you have is a rental, find out who the contract is and what their buyout terms are.
NOTICE: MSC Blog posts are for general legal information and should not be taken as legal advice. There are subtle differences in every circumstances and constant changes to the law which may change our view of your situation from those contained in the items on this blog. Always consult a lawyer to obtain legal advice you can rely on.