Going to rent a home appliance? Read this first.
January 27, 2020 | Posted by: Mark Carr
Most homeowners don't realize that when they rent home appliances such as a furnace, air conditioner, and water heater, it is a legal contract that puts a lien on their house and has to be paid out before their house can be sold or refinanced. As mortgage professionals, we see this far more often than you may think. The article linked here states that the details are hidden in the fine print of the rental contract, which is rarely brought up by the heating and cooling suppliers when they go over the contract.
We have personally seen this situation cause some clients to lose a home purchase because the down payment was coming from the equity in their current home. When they found out they had to pay off a new air conditioner they just had installed a few years ago, it left them short on the down payment for their new home.
You can read more about a recent case in Toronto here: https://www.msn.com/en-ca/news/canada/i-was-livid-single-mom-hit-with-dollar32000-bill-to-break-furnace-air-conditioner-rental-contract/ar-BBZl0mZ?ocid=spartandhp