You bought a home with a rental water heater. Now what?
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Q: We recently purchased a resale home and discovered the property had a rental water heater that was going to cost $45 per month. We were given the assumption agreement by our lawyer on closing day and were surprised at the cost and the fact the rental contract runs until 2022. We plan on living in the home for a couple of years and hopefully then redevelop the property with a new building on the large lot. Are we stuck with the heater?
A: In most agreements of purchase and sale there is a section that outlines if there are any rental items that accompany the purchase of the property. Usually the real-estate agent will indicate “hot water heater — if assumable.” I checked with these buyers and the heater that had only recently been installed is one of those new instant water heaters that are energy efficient and also more expensive than a conventional hot water heater. As they agreed in the contract to assume (or in other words, to take over) the rental of the hot water heater, they are contractually bound to either pay the rental fee until the contract expires or pay the amount to outright purchase the heater.
Purchasers should be careful about rental items included, or not included, in their agreements of purchase and sale and make sure they know the cost of these items before they sign on the dotted line.