Rental Water Heaters: Questions to Ask

In a nutshell

Renting a water heater is common in Ontario. It can be convenient, since repairs are usually included. It can also cost more over the years than owning one, and some contracts are hard to leave. Know what your agreement says before something breaks, before you buy a house, and before you replace the tank.

Working through it

1. Find out who owns it

Check the label on the tank and your utility or monthly bill. If a rental company is named, find the account and the contract. If you are buying a home, ask the seller in writing whether the heater, furnace or air conditioner is rented, and get the documents.

2. Read the key terms

• The monthly charge and how it can increase.
• What is covered: parts, labour, emergency service.
• Buyout or removal terms, and any fees to end the rental.
• Whether you can replace the unit with your own.
• How long the contract runs and whether it renews automatically.

3. Compare

Add up the rental cost over the expected life of the tank, then compare that with buying and installing one yourself plus likely repairs. Neither answer is right for everyone; it depends on the numbers in your contract and how many more years you expect to live there.

Clues worth noticing

Be cautious with:

• Door-to-door sellers who say your tank is unsafe or needs urgent replacement, or who claim to be from your gas company or the City.
• Any request to sign on the spot.
• Contracts with steep buyout schedules or charges that climb each year.
• Equipment that is fifteen years old and still on a rental bill.

When a rented tank fails, call the rental company first. They usually have to repair or replace it, and someone else working on their equipment can complicate things.

Signals that it needs a licensed plumber

If you own the tank, or have bought out your rental, a plumber can diagnose problems, repair it or replace it. Our water heater repair page lists common faults, and gas water heater replacement covers new installs. For a leaking tank or no hot water in winter, see our emergency plumber page for what to do first.

Thinking about the long term? Water heater lifespan and tankless vs tank help frame the choice. And if the tank sits in a condo, read condo leak responsibility, since a failing heater can flood the unit below.

A short phone call to the rental company to ask about buyout, before you need anything, gives you the information to decide calmly rather than under pressure.