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In Ontario, many homeowners rent their water heater – but this is not a common practice elsewhere in Canada.
It costs significantly more to rent than buy a hot water tank over the course of its average lifespan.
Hot water tanks are mechanically very simple, require little to no maintenance (drain it once a year) and last an average of 16 years. And if there is an issue, you still have to make the phone call, schedule a visit, they come out and do the work whether or not you call the rental company or a local contractor. And if it breaks, you’ll still have (cold) water in your house.
Ontario homeowners often find that their hot water tank is rented from from Reliance Home Comfort or Enercare (previously Direct Energy) for $30 to $40 per month depending on the size of the tank. Tankless water heater rentals are commonly found in new builds and cost $35 to $50 per month.
The average lifespan of a hot water is 16 years according to Enercare’s annual report and in that time, rental payments would add up to $5760 to $9600.
It costs $600 to $1000 to buy a new hot water tank (HWT) and $400 to $600 to have it professionally installed for a total of $1000 to $1600.
So it costs 4.5 to 9 times more to rent than buy over a 16 year period and for most homeowners, owning is financially better than buying after about 3 to 4 years.
In addition, the agreements stipulate that these charges are increased every year by the greater of 3.5% and Ontario CPI (Reliance) and CPI + 2% (Enercare).
A traditional 40 to 60 gallon electric tank costs between $500 to $1,000, while a natural gas tank is $700 to $1,400. High efficiency versions go for $1,500 to $2,000.
An electric tankless water heater costs $600 to $900, while a natural gas version is $1,700 to $2,500.
The following are the installation costs for a 40 or 50 gallon tank that is atmospherically vented:
| Installer | Cost |
|---|---|
| Home Depot | $513 to $594 |
| Lowes | $450 |
| Local Plumber | $500 |
Home Depot’s price depends on the unit: Rheem Performance Series (6 year) vs Rheem Performance Platinum series (12 year).
Renting a water heater is often a poor value for consumers and purchasing your own can result in substantial savings over time, according to the Competition Bureau.
Reliance has been charging us $64.65 per quarter – so $21.55 per month or $258.60 per year for our John Wood 40 gallon, natural gas tank which costs about $1000 brand-new:
However, there are a few scenarios in which a case can be made for renting instead of buying – particularly you cannot afford the upfront cost of a new unit or if your water is very hard and you do not have a water softener causing the tank to fail frequently. Additionally, if the home is a rental property, it can make financial sense.
In 2021, a larger 50 gallon tank GSW – G850T45N-PDV-ES2 30 tank was available to buy at Rona for $940. Assuming a generous installation fee of $500, the total with tax comes to $1627.20.
Enercare was renting this unit to customers for $40 per month ($480 per year) for its “useful life” – an average of 16 years and range of 10 to 20 years.
So total payments made during the agreement would amount to $4800 to $9600 – 4.5 to 9 times the cost of the tank and renting eclipses the cost of buying at about the 3 years and 5 months mark:
This means that you have agreed to assume the contract notwithstanding that you never saw or signed it. The law more or less says that if you had had concerns, you could have made the Agreement conditional on reviewing the rental agreement.
If the water heater is not listed under rental items, the real estate agent made a mistake and you can demand that the seller buy out the contract.
When we purchased our first home in 2017, we were not advised by our real estate agent, lawyer or home inspector that it came with a rented tank.
Say it is so you can see what your next steps are and know your rights and responsibilities. You want to see an original signed copy of the contract and the paperwork related to your unit & address, down to the serial number of the unit installed.
I called Reliance and after giving my name, phone number and address and asking for the agreement, they told me that there was no contract – simply month-to-month charges.
In this case, you may not be obligated to keep paying them as there is no legal commitment. I recommend not giving them any other personal information or allowing them to come to your home so it is not possible for them to “come up with” any documentation.
If they play hardball, here are some options according to Redditor TemporaryBoyfriend:
If they can’t produce it, then there’s no contract. Do your best to get them to put it in writing.
If they can’t or won’t, write a letter describing your conversation as best as you can, stating that they’re unable or unwilling to provide the documentation of the contract, and that without that, as the new owner, there is no proof of an agreement, so you will not be paying any additional fees, and request the return of any funds you’ve paid since taking possession of the property.
Alternately, pay to have it replaced, remove the old one, and send a letter via certified mail, requesting that they come pick up their property or it will be disposed of at their expense. Let them put a lien on your property, and deal with it when you sell your home. Document everything well.
They told me it was installed September 28, 2010 – so it’s been over 10 years.
They gave me 3 options:
To schedule an appointment, fill out the form on their website.
I didn’t even have to ask for this, but the representative gave me a reference number in case I needed to refer back to the call.
Find a local plumber or HVAC company who will disconnect and remove the old one, deliver it to the rental company and install a new one.
You can also buy from Home Depot or Lowes and have the work done through them, though they probably won’t take the old unit.
Depending on which company you’re with and when your unit was installed, you may have no choice but to buy out the rest of your contract. The price depends on the make and model of the unit and how many years it’s been in service. Example buyout schedules and prices can be found in the next section.
You can then run it until it dies – just make sure you have a floor drain or an unfinished basement in case it leaks. Then install a new one.
Tip: Even if you don’t decide to buy it out, some rental companies will offer you a retention offer of 3 to 6 months of free rental when you call to tell them you want to buy it out and get buyout details.
Terms for Reliance contracts vary by region and year, but here are the ones I found which seem to be more common:
For agreements started after November 5, 2014 and until November 5, 2024, the 2014 Competition Tribunal orders (10-year penalty) by the Competition Bureau to Reliance Home Comfort applies, which state:
Termination
Removal
Reliance shall permit a Customer or its Agent to:
Fees
Other than any outstanding rental payments and interest charges owed, Reliance may not charge any Exit Charges other than a:
For installs made before November 5, 2014, the following agreement applies:
You will not be able to terminate this agreement until you have rented the water heater for at least a period of 84 months following the commencement of your rental agreement (the “Minimum Rental Term”), unless you buy the water heater from us in accordance with this agreement.
If the water heater has reached the end of its useful life and we are not installing a replacement, you shall at such time own the unit.
I was not able to find a copy on their website, but I found a few examples online:
| Age (Years) | Buyout price |
|---|---|
| 4 | 1800 |
| 5 | 3,726 |
| 5 | 1500 |
| 7 | 700 |
| 7.5 | 2118 |
| 8 | 895 |
| 9 | 700 |
| 10 | 545 |
| 10 | 700 |
| 11 | 329 |
| 11 | 810 |
| 12 | 600 |
| 14 | 1400 |
| 14 | 210 |
| 15 | 700 |
| 16 | 25 |
| 16 | 25 |
| 20 | 100 |
If yours was installed before September 15th, 2010, you can terminate your agreement at any time with no buyout. You have to return it to them (free) or they will disconnect and remove it for you for $75.
Since 2010, Enercare has used a “buyout only, useful life” (BOULC) contract. The only termination option for a BOULC prior to the end of the water heater’s “useful life” (determined solely by Enercare and averages 16 years – ie. failure) is to purchase the unit at a price schedule determined by Enercare when the contract is concluded.
Since the 1950s, rental companies have provided home builders with subsidized water heaters which they would pre-install into new homes and the rental companies would receive a monthly rental fee from the homeowner in exchange. Initially, the purpose was to stimulate the adoption of natural gas, but over time became an aggressive, highly profitable, rent-collecting business model.
Home buyers are often surprised to find out they’re on the hook for a contract. During the final review and signing process of the big stack of legal agreements it is often not made clear what the terms and conditions of the agreement are. The only indication that an agreement even exists are the words “hot water heater” listed under the Rental Items section.
If you buy a house with a rental agreement, it becomes your contract. When negotiating, request for any rental agreements to be removed or paid off when making your offer to purchase if you do not want them. Of course, this is easier said than done in a hot real estate market.
Buyers of new builds are also surprised as they assume that it is part of the home’s purchase price. When they try to get the builder to let them opt-out of the rental, they find that many builders have agreements with the rental companies and that including a rental unit in the home is non-negotiable.
Those who are aware don’t have the leverage to deal with it during the buying process in a sellers market (similar to how home inspections have fallen by the wayside).
Once the contract is in place, the cost of buying out the contract is made to be exorbitant and the process challenging – to the point where the rental companies and their predecessors have been investigated, fined and made to make commitments numerous times over the past 20+ years by the Competition Bureau.
This is compounded by the fact that Canadians move an average of 4.5 to 5.5 times in their life – or about once every 8 to 10 years – with many planning or uncertain about moving sooner than that, so buying it out doesn’t sound like as good of a deal.
Stuck with the rental from day one, most homeowners stick with it (since it is only $15 to $40 per month… for the rest of time).
Since the early 2000s, the Bureau has taken significant enforcement action to address concerns relating to alleged anti-competitive conduct in this market, including filing applications and Registered Consent Agreements with the Competition Tribunal.
If you feel that your rental company has taken part in deceptive marketing practices or abuse of dominant position, you can submit a complaint to the Competition Bureau here and/or file a complaint about a contract signed in your home if you think a business has broken the law in Ontario.
Or leave a review of Reliance, Enercare, Simply Group or Ontario Green Savings here on Cansumer.
We’re interested to know – do you rent or own your water heater? How much did/does it cost? How old is it and has it ever required any maintenance? Let us know by leaving a comment below!
Alex Wideman is a consumer rights advocate, serial entrepreneur and the editor-in-chief of Cansumer. He has a bachelor's degree in electrical engineering from Queen's University.He is passionate about helping others save time and money and has been creating consumer-focused online resources for over 10 years. More about Cansumer Read more
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Opt out or contact us anytime. See our Privacy Policy.Such an excellent and useful read. Thank you so much. We just purchased a house in Ottawa in September 2023 and took on the water heater rental with Reliance. After 6 months of $56/month rental payments, I thought I should investigate a buy out. The water heater was installed in 2018, so 8 years old (model is Rinnai RUC80) and they quoted me $3438 + tax buy out price! Absolutely insane. After I pointed out I could purchase a brand new one for the same price, they then went on to tell me that I couldn’t get the same quality because they have a direct relationship with the manufacturer and therefore theirs are higher quality. When I asked them to describe which aspects of theirs were higher quality (i.e. components, materials) they were unable to pin point anything and further pushed the line, “we have a relationship with a manufacturer”. Unbelievable tactics and complete fabrication. But they’d give me three months free if I committed to another 12 months with them. Can’t wait to buy one and get it installed and never deal with them ever again. Reply
Hi,
Well written, clear and thoughtful article.
If this is the unfortunate situation in Ontario, in the province of Quebec it is at least twice as bad.
In Quebec, the normal daily grind is to face Constraining sales tactics, no one cares for the client/customer (unless maybe under exasperation). Usually no one is available (including manager or supervisors), just bots or robots repeating scripts they were told to tell.
In Quebec, there’s always the crude reality of labour shortage or the ensuing ‘staff shortage’ excuse leading to the same end result: extremely poor customer experience.
In the increasing lack or absence of responsible Governance, citizens and residents are left at lost to struggle and navigate unbridled corporate rules/contracts or “copinage” corrupt culture. Reply
Why does the water heater rental cost so much with Enercare, it’s more than the actual gas bill with Enbridge. Example below:
The cost of water heater rental is as follows:
Nov 10 – Dec 7 – 2023 $76.15
Dec 8 – Jan 10 – 2024 $77.41
Jan 11 – Feb 8 – 2024 $80.41
I think this is a total scam, the cost of the water heater to purchase and repair, far outweighs the cost of renting it. It only needs to be drained once a year, the gas valve, needs adjustment now and again. Repair it when it needs it. This is crazy. Reply
It’s not a big deal to install a water heater yourself, especially if you are replacing an old one. BTW if you drain your tank as the article suggests, BE SURE TO TURN OFF THE HEATER FIRST, especially if it is electric. The heating elements will melt if exposed to air while under power. It sounds crazy to me, to rent a water heater. But then I own my router/modem too. Reply
Russell SutherlandI have a hot water tank, gas powered that was installed in June of 2008. I am planning on canceling the rental from Enercare and then buying out the tank for $100. So far I have had no issues with the tank. Would it be wise to have it replaced? Reply
Thank you so much for this amazing article Alex! We just moved 2021 to another home renting a PV60 from Enercare. Due to hot housing market, hard to negotiate in purchase as it was seller’s market. Turns out the water tank was installed Jan 2020, so today (July 2022) it’s only 2.5 years old. I looked at the buyout schedule and it makes sense to buy it out *as early as possible*, as the buyout only drops about $70/year whereas at $40/month rental I am “investing” $480/year into the tank! I wish I did this as soon as we moved into the house last year! The buyout is about $1800, so it is equal to renting the tank at $40 for 45 months (3.75 years). If I had bought out the tank last year I estimate the buyout would have been around $1900, or 48 months (4 years). So I ended up paying $480 for this past year of rental when it only would have cost me $100 more to buy it last year (so I basically lost out $380 due to my inaction). Every year you postpone the buyout the more you are behind… I would have kept paying $480 to rent yet only saved $100 more on the buyout. In summary, buying out my 2020 tank *today* means I fully own it in 2026 for the same cost as if I rented it until then… that’s the “break even” point, 6 years (which is also the warranty that comes with the tank by the way – and I registered it on the Bradford-White website with my serial number). If I get hopefully another 5-10 years out of the tank after that, I’m ahead $2400-$4800 (which would have been continuing $40/month rent for 5-10 years)! As far as the process goes, I called the Enercare number 1-877-334-1846 and they kept me on hold for more than an hour. I spoke to someone within 1 minute and told them I wanted to buy out the tank, then I was on hold for 20 minutes while they “did some calculations” to figure out exact buyout (it should take 2 minutes to punch numbers into the computer and get a readout from the buyout table). Then after they gave me a buyout price, I told them I still wanted to buy it, they then started offering me lots of incentives to stay… 2 free months rental and reduced rate for a year, then when I said I still want to buyout they gave me 3 months free rental, etc. The lady told me she had to follow a “script” and it included telling me that I am responsible for tank, all repairs, etc. I said I know and still wanted to buy the tank and then she put me on hold for another 50 minutes to “process” it, while checking in every 15 minutes to tell me “it will be a few more minutes”. I am pretty sure they are relying on consumer attrition or your phone to run out of battery (make sure you are on a landline or plugged in) to make it harder. It is a sick game they play, and very sad that people who are employed by Enercare have to behave this way to earn a living. Just make sure you are doing something else and on speaker-phone so they don’t steal your time the same way they steal your money. When it’s all said and done, the buyout appears on your next gas utility bill (in my case Enbridgegas which is where my water tank rental shows up) and once you pay that you are all done with them! All in all the call was slightly over a 1 hour and I verified before hanging up that I’d have a written confirmation that I fully own the tank and no longer obligated to anything with them and no longer receiving any kind of rental (which is apparently sent to the email address I provided them). So Alex, thank you again for this amazing advice and helpful site! Reply
Cansumer StaffThis is great Edy, thanks for sharing all of these details and tips! It is unfortunate that you had to spend over an hour on the phone to complete such a simple request, but as you said, it is the game they play.
I made the same phone call today and had much the same experience. The lady offered first 1, then 3, then 6 months free rental if I stuck with renting rather than a buy out.
I just moved in a new built house from Aspen Ridge homes and got stuck with a rental agreement contract for hot water tank from Cricket comfort. I hesitate to sign the rental agreement but may have to do so because it is listed in the APS with the builder. I found the monthly rental payment is high. It is $45.24 plus $5.88 HST.
The term contract is 180 months (15 years).
The buyout option is ridiculous high too. Year 1 $4586.64
Year 2 $4437.07
Year 3 $4273.63
” ”
Year 16 $ 100 The tank is still not yours at the end of the term. You still have to continue pay the rental fee or get it removed. You have to pay for the removal too. Is there any suggestion what should I do?. How can they come up with $4586.64 buy out cost?. Thanks Reply
Purchased a townhouse in Pickering and was not informed that the water heater was a rental. It’s a Polaris PR100342NV (34 Gallon) installed in 2012 and rented from Enercare. The buy out price is $2,300 and the monthly rental fee is $70. Reply
We just purchased a home that has a reliance contract that is 10 years old, so the tank itself is 10 years old, and they want $850 to buy it out. If we buy it out, we get stuck with a 10 year old tank. To buy a new one has gone up to around $2500 with installation. Stupid. Been here around 6 months now though so we cannot cancel as article describes. Not sure yet what we will do but desperate to get rid of these monthly fees, which have already increased by $4 a month since we got here. Reply
Paul WadesonWe have a gas water heater from reliance that was installed in 2009, it is in a rental unit. It stopped working and reliance reliance told us it would be 3-4 days before the could get someone out to fix it. We could not wait that long as it is in a rental. We bought a new one and had our contractor install it. They disposed of the tank by mistake and now reliance wants $615.35 for a buy out on a water tank that 13 years old, rusted, and not working. How can this be? My contractor has the gas valve so I can give them that. The rest of it was garbage. Reply
ita unfortunate….but they got you by the nuts. They own the tank…you were renting it. Working or not working….they owned it, you’re renting it. So that charge is a fee to “buy” the tank that they own. It’s so stupid…and very unfair, but like I said, they got you by the nuts. When it comes to Water tanks…buying it is ALWAYS the best idea.
Tania KermanMy contract is from 2009 with Livclean, a company that has since been taken over by Reliance. The Livclean contract is for “an indefinite term”. For the past several months we were having issues with poor water pressure and lukewarm water. It was serviced twice and rather than get stuck in another long term rental, we opted to purchase a tank from another company. Now Reliance is using the old Livclean contract to collect a $250 termination fee. Because I have nothing from Reliance, I have no idea if they can rely on the old contract. From what I’ve read in the Consumer Protection Act, all contracts need an end date. I’ve reached out to the Ministry but it could take up to 15 days to get a response! Any ideas? Reply
