Ellen Roseman Blog

Why I'm always writing about water heaters


I can’t seem to stop writing about the nasty tricks played by water heater salespeople. Just when I think there’s nothing new to say, I learn about another outrage.

An older couple, Sandra and Daryl, wrote to me about their experience with Ontario Consumers Home Services (OCHS), a company I wrote about last week in the Star. Along with renting a water heater, they ended up agreeing to a new furnace, too.

OCHS likes to install the rented equipment right away, rather than waiting until Ontario’s 10-day cooling off period end. People might change their minds after 10 days, the company’s chief executive Vitali Godonooga told me.

What if people change their minds during the cooling off period, but after the rented equipment is installed? When Sandra and Daryl told OCHS to get rid of their new stuff, they were threatened with removal fees. They felt abused and mistreated.

Who can blame them? This water heater company, which has been in business for just over a year, was penalizing them for exercising their legal right to cancel without a penalty. You can read their story below and the company’s response.

I also have an update about a court case that tested a rental company’s responsibility when a water heater leaks. Reliance Home Comfort denied liability, but was shot down by the judge in divisional court. Here’s my earlier article.

Reliance appealed and was shot down again this week. It was ordered to pay $16,000 to the homeowner for water damage in the basement caused by the leak.

This article in Canadian Underwriter talks about the key issue. Does a rented product come with an implied warranty of fitness during its entire lifespan? The court said yes.

The 14-page judgment by E.E. Gillese, released Nov. 27, dismissed Reliance’s argument that the contract was signed before the Consumer Protection Act was strengthened in 2005.

Here’s the crucial argument:

Ms. (Shirley) Szilvasy was an ordinary homeowner. Reliance is in the business of supplying — by means of providing and servicing — hot water tanks to residences.

At the relevant time, Reliance had approximately 1.2 million tanks on lease to its customers. In the circumstances, there can be no doubt but that Reliance knew the purpose for which Ms. Szilvasy rented the hot water heater (namely, to produce hot water for her home) and that she was relying on its skill and judgment to provide a properly functioning water heater.

Accordingly, there was an implied condition that the water heater would be “reasonably fit” for the purpose of heating water in her home. The water heater in question was not reasonably fit for that purpose because it leaked.

Here’s a link to another Reliance case decided at the same time.

So, why am I always writing about water heaters? It’s a business that pits smooth corporate operators against naive, inexperienced homeowners. The result is often exploitation.

Much as I’d like to move on, I can’t avert my eyes while the steamrolling continues and grows. Luckily, the courts are starting to see the business in its true light.