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Water Heater Rental Buyout: How to Exit Your Contract
Read the contract, compare buyout vs replacement, and avoid door-to-door pressure.
Many homes in Ontario and other parts of Canada came with a rented water heater, and the monthly charge on the utility bill can go on for years. A lot of homeowners eventually want out.
Leaving is usually possible, but the cost and steps depend on the contract you have.
Start with the contract
Find the agreement, or call the rental company and ask for a copy. Look for the buyout schedule, which usually drops as the tank ages, plus any removal or return fees.
If you bought the house with the rental, the contract likely transferred to you at closing. Your lawyer's closing documents may include it.
Your three options
- Buy out the existing tank and own it
- Replace it with a tank you buy, and return the rental unit
- Keep renting if the maintenance terms suit you
Replacing with an owned unit
A licensed plumber or gas fitter can install a new tank or tankless heater. Ask whether they'll handle the return process with the rental company or whether you have to arrange pickup.
Get the install date of the old tank and ask for quotes from at least two installers so you can compare against the buyout.
Avoid high-pressure sales
Water heater contracts have drawn complaints about door-to-door sales. Don't sign at the door, and verify who you're dealing with. Ontario has consumer rules for certain in-home contracts. Check the Ontario government's consumer protection pages if you think you were misled.
Common questions
They can apply the fees in your contract, but you're generally able to buy out or return the unit under those terms.
Tanks wear out over time. If yours is near the end of its expected life, replacing may make more sense than buying out.
A licensed gas technician or plumber qualified for gas work in your province.