When Robert Weaver and his wife took ownership of their new home last November, they received a nasty shock.
The previous owner had changed the rental water heater three days before the deal closed, choosing an updated model from Direct Energy.
They decided to have it removed because it didn’t fit their renovation plans. But when they called Direct Energy, they were told to pay a termination fee of $980.
Weaver said he had no information about the rental terms and conditions. But as a precaution, he had checked the company’s website to see if he could run into problems.
“Unlike other water heater rental companies operating in Ontario, as a customer of Direct Energy you are not bound by a fixed-term service contract, not for six months, not for 15 years,” the website said.
“In addition, as a customer of Direct Energy (and once again, unlike other water heater rental companies in Ontario), you are not subject to possible termination fees if for some reason you exit your contract.”
By the time he learned about the termination fee, it was too late. The tank had been drained and disconnected by his heating contractor.
Weaver spent a frustrating six weeks trying to deal with Direct Energy.
In early December, he was told he could drop off the tank himself at no cost. He arranged to borrow a friend’s pickup truck, only to get a call later, saying there had been a mistake.
“I had to call off the favour with my friend, who was already on his way to my house and had rearranged his schedule to help us out,” he says.
He called Direct Energy until he reached a supervisor, who said she’d try to work out an agreement. Two weeks later, she told him nothing had happened but she’d keep trying.
“She continued to say that Direct Energy would not bill me and she’d have the fee for the hot water tank removal waived.”
He never spoke to the supervisor again. At least six times, he was promised a call back from her the next day.
Last Wednesday, he contacted me after another fruitless call. He didn’t like being told to sue the previous homeowner, who was in his 70s and was only trying to help.
Direct Energy dropped the fee within a day.
“The situation was unique, as the previous homeowner changed the tank without consulting with Mr. Weaver after he purchased the house,” says spokeswoman Crystal Jongeward.
“We appreciate the situation this left him in and we’re sorry for the time it took to get this done.”
So, what happened? Why did he have to fight so hard to avoid a fee that wasn’t supposed to exist?
In 2002, Direct Energy signed a consent order with the federal Competition Bureau that protects customers from long-term contracts and exit fees.
The consent order runs out in 2012. But the company asked for relief, saying it faced intense competition from door-to-door rivals using those tactics.
The Competition Bureau said it could usse long-term contracts and exit fees with water heaters installed after Sept. 16, 2010, or in new homes built after Jan. 1 of this year.
Direct Energy has now removed the outdated language that Weaver found. But its new contract refers to “a buy-out schedule located on our website.”
I couldn’t locate the buy-out schedule. So, I’m issuing this warning.
When offering to purchase a home with a rented water heater, ask for a copy of the contract.
Find out if there’s a termination fee to get out early. Then, adjust your offer so that the seller pays the fee. Ellen Roseman writes about personal finance and consumer issues. You can reach her at firstname.lastname@example.org.
New Brunswick’s power company rents electric water heaters at a quite good rate…presently $6.02 /month. That includes installation and/or
any future repairs.
When I left NB to come to Nova Scotia, I went back to NB on weekends for a couple of months to complete some projects prior to sale of our house (renovation of a 200+ year old hand hewn, post & beam Cape Cod style with hand split lath and horse hair in the plaster).
Mid-Saturday afternoon one weekend, I discovered that the rented tank had failed and called their service #. By 5:30 PM , a new tank was installed and heating water…no extra charge to myself…can’t beat that…and they took the old tank away. At that time (1992) rental was 3.58/month.
This work was done by a small plumbing contractor (subcontractor to NB Power) from about 25 miles away. He always has a couple of replacement tanks in his van.
Do you think you would get a government employee to my house at 4:30 on a nice summer Saturday afternoon?
BTW, I don’t mind paying taxes for having such a great country…it doesn’t come from nothing. According to the conservative US “Heritage Foundation” and the Wall Street Journal, we are doing better than the US in economic freedom overall!!
That should be the home owners responsibility not the governments .
I think government should look after our budget and leave free enterprise alone .
The tax payer carries too big a load now, less civil servants could help save my tax dollars.
You could always move to Singapore or Hong Kong, with the best economic conditions in the world.
“The tax payer carries too big a load now.”
Of course, they will… if we keep electing governments that buy our votes with promises of spending more $$$ while at the same time reducing taxes for corporations…with more of our companies now being foreign owned.
This is a prime example where Government funds have been and still are being wasted big time .
Every body wants more services and less taxes well it does not happen .
Government services are frequently more costly then private enterprise .
Next we will be asking the government to clean our windows too.
Good to see that your starting to understand why taxes must rise if we have a more complicated society with more riches, drugs, cars, roads, boats, cabins, cottages, services etc… without a much faster growing population and tax base, taxes must rise for the people…especially when corporations are paying substantially less than they use to!
Sorry I disagree we do not need more taxes and we do not need more government looking after us .
I will buy my own water heater and pay for my garbage to be removed.
It is proven tax the corporations more and more will leave Canada and then we will need more taxes to support those who used to work and pay taxes and no longer have a job.
Less government is better government .
Have a look at the US that is struggling to get laws in place to protect their “too big to fail” corporations from themselves and… protect citizens from the same and the likes of Bernie Madoff. I think I like our system better…and I don’t have to own a gun to feel safe here.
Good old Brian he is loosing the discussion so he tries to get people looking else where . If you do not own a gun you are in a minority in your province
Lets try hard to stay on the subject of licensing Home Inspectors and trying to improve our industry and Canada.
I think Canada is doing very well thank you just look at the rest of the world .
Brazil is another country who is able to maintain them selves .
WE have Iceland Broke Ireland Broke Turkey Broke and many more in huge depth .
Now you want our Government to spend money we do not have so you can get more welfare for you and your friends.
This is not my idea of how to proceed ,stop spending on frivolous things and pull in the belt .
Yeah! Others… exhorbitant MP pension plans and $12-20+ billions purchase of planes without a public competition. BTW, the # of federal Gov employees has gone up during during Harper’s internal dictatorship!
I’m wondering how much Alberta oil money ends up subsidizing Water Heaters in NB via transfer payments. Alberta sells almost as much oil to the US as the Saudis yet we are running a deficit. Thanks to transfer payments?
Also would somebody like to explain to me why we end up with massive deficits when we have right wing governments and surpluses when we have middle or left wing governments? The Trudeau liberals tried to steal 25% of our oil reserves via the NEP so the chances of a liberal getting elected from this province is slim to none.