How to Cancel Your Water Heater Rental Contract in Ontario
Updated September 2026Learn how to review your rental agreement, determine whether your water heater can be returned, compare a buyout with replacement and understand current Ontario consumer protections.
The quickest way to get started
Identify your provider, find the original installation date and request a complete copy of the agreement. Ask for the current buyout amount and the complete equipment-return procedure in writing before authorizing removal or replacement.
Why cancel a water heater rental contract?
Water heater rentals are common throughout Toronto and the Greater Toronto Area. Some homeowners knowingly enter rental agreements when replacing a failed tank. Others discover the rental only after buying a home with existing equipment.
Monthly rental charges can appear affordable, but payments collected over the life of the equipment may substantially exceed its purchase and installation cost. Rental rates may also increase according to the applicable agreement.
Common reasons for leaving a rental include reducing long-term costs, replacing aging equipment, upgrading efficiency, switching to a tankless or heat pump water heater, or preparing a property for sale.
Why homeowners consider ownership
Your best option depends on the contract, equipment condition and how long you expect to own the home.
Lower long-term costs
Purchasing eliminates the ongoing monthly rental charge once the equipment and installation have been paid for.
Clearly defined warranties
A purchased system can include documented manufacturer parts and contractor labour coverage.
More equipment choice
You can select the capacity, efficiency, technology and installer best suited to your home.
When was your water heater agreement started?
Select the closest answer for the most relevant questions to ask your rental provider. This does not determine your legal rights.
Your tank may be governed by a returnable agreement
If this is an Enercare or former Direct Energy agreement, Competition Bureau findings indicate that some customers who entered agreements before the 2010 buyout-only contract may be able to terminate by returning the water heater without a buyout. Ask the provider to confirm your agreement type and return procedure in writing.
A buyout-only agreement may apply
Enercare and its predecessor began using buyout-only, useful-life contracts in 2010. Ask whether your agreement permits equipment return or requires a buyout before the provider determines that the tank has reached the end of its useful life.
Review both the contract and how it was sold
Ontario introduced additional requirements for certain water heater agreements on April 1, 2015. Cooling-off rights depend on factors such as where the agreement was made and who initiated contact. The 2015 rules do not provide an automatic right to cancel every agreement.
Start by requesting the contract history
Ask the provider for the original installation date, the date the agreement began, the customer name under which it originated and a complete copy of the terms it believes apply. Also review your Agreement of Purchase and Sale and closing documents.
Buy out the tank or return it?
Ask the rental provider for both options in writing. Availability and charges depend on the applicable agreement.
Return the rental equipment
Some agreements permit the water heater to be returned, dropped off or collected after professional disconnection.
Confirm who may disconnect it, where it must be placed, who transports it and every applicable account-closure, pickup or return charge.
Purchase the existing equipment
A buyout ends the recurring rental charge while allowing the existing water heater to remain installed.
Compare the buyout with the equipment’s age, condition, expected remaining life, efficiency and warranty coverage after purchase.
What to collect before contacting the rental company
Photograph the complete equipment label before calling your provider.
Steps to cancel a water heater rental
Do not remove or dispose of rented equipment before receiving the provider’s instructions.
Identify the provider
Check your gas, utility or separate rental bill to determine who owns and bills for the equipment.
Request the complete agreement
Ask for the signed agreement, all schedules, amendments, fees and current termination provisions.
Confirm the agreement date and type
Ask whether the equipment is governed by a returnable agreement or a buyout-only, useful-life agreement.
Request both available options
Obtain the current buyout amount and complete return procedure, including all associated charges.
Compare the total cost
Consider the tank’s age, condition, buyout, return costs, replacement price and remaining coverage.
Coordinate replacement and return
Arrange professional disconnection and installation only after confirming the rental company’s requirements.
“I am reviewing my water heater rental and need a complete copy of the agreement that applies to this equipment. Please confirm the original installation date, whether it is a returnable or buyout-only agreement, the current buyout amount and the complete equipment-return procedure. Please provide all charges and instructions in writing.”
Was your Enercare water heater installed before September 2010?
The agreement date may significantly affect your cancellation options.
According to the Competition Bureau of Canada, customers who entered Enercare or former Direct Energy water heater rental agreements before the introduction of the company’s buyout-only contract in 2010 may be able to terminate by returning the water heater without paying a buyout fee.
Since September 2010, Enercare and its predecessor generally used what the Competition Bureau described as a “buyout-only, useful-life contract.” Under that agreement, purchasing the water heater may be the only method of termination before Enercare determines that the equipment has reached the end of its useful life.
What to ask Enercare
Ask Enercare to confirm the original agreement date and whether the tank is governed by a returnable or buyout-only agreement. Request its answer, the applicable terms and all return instructions in writing.
Ontario water heater contract protections
Different rules can apply depending on when, where and how the agreement was entered.
April 2015 protections
Ontario introduced additional disclosures and a 20-day cooling-off period for certain qualifying water heater agreements beginning April 1, 2015.
Door-to-door restrictions
Ontario restricts unsolicited door-to-door sales of water heaters, furnaces, air conditioners and certain other home-service products.
2024 NOSI ban
Ontario banned Notices of Security Interest for consumer goods. Existing consumer-goods NOSIs are deemed expired and may be removed from title.
Example disclosure document. Your agreement and the circumstances under which it was entered determine which protections apply.
Review Ontario’s home-service contract rules, contract cancellation guidance and NOSI information.
Did you inherit the rental when purchasing your home?
Many Ontario purchasers discover that the water heater is rented only after reviewing closing documents or receiving their first bill. Review the Agreement of Purchase and Sale, rental disclosure, statement of adjustments and documents provided by the builder, seller or rental company.
Ask the provider for the agreement it believes applies to you, including the original installation date and current buyout and return provisions. If contractual responsibility or disclosure is disputed, obtain advice from an Ontario lawyer.
Read the CBC Marketplace report: Homebuyers feel duped by hot water tank rentals included in their new homes .
What if the provider says the tank cannot be returned?
Ask the representative to identify the exact agreement provision that requires a buyout or prevents return. Request the complete agreement and response in writing instead of relying solely on a telephone explanation.
Keep representative names, dates, confirmation numbers, emails, invoices, equipment photographs and return receipts. If you believe your consumer rights were violated, contact Consumer Protection Ontario.
Water heater rental cancellation FAQs
Can I cancel my water heater rental at any time?
You can ask to end the rental, but the available options and charges depend on the agreement. The provider may permit a buyout, return, pickup or another termination process.
Can I return an Enercare water heater installed before 2010?
Possibly. The Competition Bureau reported that customers with Enercare or former Direct Energy agreements entered before the introduction of buyout-only contracts in 2010 may terminate by returning the water heater without paying a buyout. Enercare should confirm the agreement date and return procedure.
Can I automatically cancel a contract from before April 2015?
No. April 1, 2015 marks the introduction of additional Ontario protections for certain new water heater agreements. It does not automatically cancel agreements entered before that date.
Does every water heater contract have a 20-day cooling-off period?
No. A 20-day period applies to certain qualifying water heater agreements. Eligibility depends on factors including where the agreement was made and who initiated the transaction.
How much does it cost to return a rental water heater?
Return, disconnection, closure and pickup charges vary by provider and agreement. Request an itemized written quote before removal.
Should I buy out an old rental water heater?
Compare the buyout with the tank’s age, condition, remaining life, efficiency, warranty status and replacement cost.
Can an HVAC contractor remove my rental water heater?
A qualified contractor can disconnect and replace the equipment, but the rental provider’s instructions should be obtained first. The provider owns the equipment until it is purchased or properly returned.
Can a rental company still place a lien on my home?
Ontario banned Notices of Security Interest for consumer goods in June 2024. Existing consumer-goods NOSIs are deemed expired, but the underlying rental or financing agreement may remain valid.
What proof should I keep after returning the tank?
Keep the return receipt, confirmation number, serial number, photographs, representative’s name and written confirmation that the rental account has been closed.
Ready to replace your rental water heater?
City Home Comfort can help you compare tank, tankless and heat pump water heater options, provide clear installed pricing and coordinate replacement after you confirm your provider’s return requirements.
