Published 22 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
Rented or financed water heaters, furnaces and air conditioners must be dealt with when you sell: the buyer assumes the contract, you buy it out, or you replace the equipment. List rental items in the agreement, and have your lawyer check title for any registered security interest well before closing.
Many Ontario homes have a water heater, furnace, air conditioner or water softener that the owner does not actually own. It is rented or financed through a contract. When you sell, that contract has to be dealt with, and surprises here delay closings every month.
Find out what you have
Look at your utility bill or bank statements for a monthly charge from a rental company. Check the equipment label. Ask your lawyer to search title, because some older rental and financing contracts were registered as a notice of security interest.
The three ways it usually goes
- The buyer assumes the rental. The agreement of purchase and sale lists the rented items and says the buyer will assume the contract. This is the most common approach.
- You buy it out. You pay the company the buyout amount and the equipment becomes a fixture that transfers with the house.
- You replace it. Sometimes a new owned unit costs less than the buyout on an old one.
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What goes in the agreement
The rental items need to be listed clearly, in the section for rental items, so the buyer knows what they are taking on. Buyers in a strong position can refuse to assume a contract, or ask for a credit. Deal with it at the offer stage rather than on closing week.
Anything registered on title
If a security interest is registered, the buyer’s lawyer will usually want it gone before closing. That can take time, because you need a discharge from the company. Start early and get the payout figure in writing.
Watch for high-pressure contracts
Ontario has tightened the rules on door-to-door sales of these products because of past abuses. If you signed a contract that looks one-sided, speak to your lawyer; there may be options you don’t know about.
The takeaway
Find every rental contract before listing, decide whether to transfer, buy out or replace, and clear anything registered on title early.
Talk it through with me
Get a first-time buyer plan
Tell me your savings, income range and target area. I will send a realistic price range and next steps.
I will come back to you personally, usually the same day. If it is urgent, call or text 833-330-1925.
Frequently asked questions
Can a buyer refuse to take over my rental water heater?
Yes. It is negotiable. The buyer can ask you to buy it out, remove it or provide a credit.
How do I know if something is registered on my title?
Ask your lawyer to search title before you list.
Should I buy out my rental water heater before selling?
Compare the buyout with the cost of a new unit and the effect on buyers. Often a buyout or replacement makes the sale cleaner.
Where do rental items go in the offer?
In the section listing rental items, with the buyer’s agreement to assume them spelled out.
Sources
- Government of Ontario — door-to-door sales rules — consumer protection for rental equipment
- Government of Ontario — land registration — registrations on title
Related reading
- Chattels and Fixtures Clause Ontario: Rentals, Warranties, Removal
- What Happens on Closing Day in Ontario? A Step-by-Step Guide
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Etobicoke. I work with buyers and sellers across Toronto and the GTA, with deep local knowledge of the west end. Four-plus years of active GTA transactions and over $100 million in sales volume. Every market figure here comes from TRREB’s published tables and every rule from RECO or Ontario legislation, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.