Before you buy that home with the neat mini-split air conditioner you admire, get your home buyers’ liability for HVAC rentals in writing.
Heat, ventilation, and air conditioning (HVAC) systems can be pricey, which is why some home buyers rent instead of owning. Inheriting an HVAC system with a home purchase may make you liable for the seller’s ongoing contract.
That could leave you paying a lot more than you expect, for an HVAC system you don’t even own.
It works like this:
- Liability for HVAC rentals may transfer to buyers when sellers neglect to mention units are chattels.
- Chattels vs fixtures in Ontario are the difference between furniture or appliances a seller takes, and immovable objects like furnaces or garages left behind when they vacate.
- HVAC rentals are leased to sellers. When a home changes owners, unwitting buyers may be hit with rental expenses to keep a unit they thought was a fixture.
- A firm, no-conditions offer disadvantages buyers who fail to ‘look under the hood’.
Chattel vs fixture in Ontario law. What are chattels in real estate?
Liability Lawsuits for HVAC Rentals
An Orangeville couple who bought a farmhouse in 2010 were astounded to receive a collection notice seven years later claiming financial liability for HVAC rentals. The farmhouse and its contents were defunct, replaced by a new home they built years earlier. What to do if a debt collector approaches you.
Contract pitfalls to avoid for new home buyers.
No mention was made of a rental water heater in the agreement of purchase and sale. Even more confusing was a signed affidavit from the seller produced in 2010 stating: “There are no rental contracts relating to any of the systems or their components on the property.”
A lawyer’s letter denying liability for HVAC rentals was insufficient to clear the debt. A new claim arrived four years later, after the HVAC rentals firm changed collection agents.
Unusual lawsuits are “a schwing and a miss”.
Common Complaints About HVAC Rentals
CBC’s Go Public consumer advocacy show has “dozens of complaints” from homebuyers facing liability for HVAC rentals like furnaces or air conditioners. It’s up to sellers to disclose if HVAC rentals exist.
Buyers can assume liability for HVAC rentals, but only by informed consent. If the seller makes purchasing the HVAC system part of the offer to purchase, be sure to consult with your real estate lawyer before agreeing.
For home buyers like the Orangeville couple, being misled while purchasing their home means they’re off the hook. Home inspectors may notice if a home has HVAC rentals, making your furnace, water heater, or air conditioner chattels. That’s good, because a Small Claims Court lawsuit could be the fate of unwary homeowners. File in Ontario Small Claims Court.
Can you sue God?
That’s not all. HVAC rentals often come with a property lien, or lease of chattel notice. That can hold up transferring title to a property you buy. Instead of assuming liability for HVAC rentals, have the seller buy out the rental contract before you agree to purchase a home.
FAQs on Liability for HVAC Rentals
1. Who is responsible for the furnace in a rental property?
The property owner is responsible for fixtures like furnaces. That could change if you rent an HVAC system, say because you need a medical grade filter. Be sure to get a signed and witnessed written agreement from the owner about what happens if you move or are evicted. Unless you notify the rental company, you are financially responsible after you leave. A removal fee may also be charged.
2. Who is responsible for AC maintenance?
HVAC rentals companies are responsible for maintenance. Your contract will specify who to contact for servicing. Be sure to follow this exactly. Doing it yourself, or hiring a third party, could void your contract. You’ll likely wind up paying the maintenance bill, and it could get expensive if anything is damaged or altered.
Tips for the first time home buyer in Ontario.
3. Who is responsible for the HVAC in a triple net lease?
Triple net leases pass all the operating expenses onto tenants. That includes maintenance and repairs. Confirm your contract includes the HVAC, or add a clause if it doesn’t.
4. Who is responsible for the HVAC system in a commercial lease?
Commercial tenants may be responsible for servicing and maintaining HVAC systems, or replacing damaged equipment. Your lease agreement should ideally require the owner to make major repairs or replace defective systems. Having a business lawyer review the agreement before you sign prevents misunderstandings.
Can you win liability lawsuits against home inspectors?
Why You Need a Real Estate Lawyer
Axess Law’s real estate lawyers in Toronto, Greater Toronto Area, or Ottawa liaise with your real estate agent and mortgage lender to meet closing deadlines on time. We review your agreement of purchase and sale to ensure it protects your right to cancel a purchase or sale by mutual agreement, and negotiate to make amendments if mortgage financing takes longer than expected.
When a deal falls through who keeps the deposit.
Professional home inspections can reveal defects you overlooked when you toured a property with your realtor. Axess Law’s licensed real estate lawyers negotiate with the seller’s agent to make minor repairs, or reduce the price if a home inspection turns up costly structural or health and safety problems.
What to bring to your Axess Law real estate lawyer appointment.
If HVAC rentals are preventing a sale, our experienced legal team requests the seller to buy out the contract, or cancel it at their own expense. We search title to a property for construction liens or other obstacles, then transfer it to your name and hand you the keys to your home.
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Hiring a real estate lawyer.
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Make appointments quickly by phone or use our easy online booking form to select days and times that work for you. Call our toll free lawyer line at 1-877-402-4207 (647-479-0118 in Greater Toronto Area), or pop into Axess Law locations near you to make appointments in person.
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