Ontario homeowner shocked it’s $17K to buy out AC and water heater contract

An Ontario woman who used to live in Toronto said she saved for ten years to have a down payment so she could buy her dream home in the countryside.

Now she is shocked to find out there is a lien on her home connected to rental contracts for a water heater and air conditioning unit.

“I was devastated actually to find out that my only asset, this house that I have saved for ten years for has a lien on it,” said Kara Santokie, of Georgina, in south central Ontario on Lake Simcoe.

Santokie said when she bought the home in August of 2021 the seller did tell her the home came with two rental items.

“When I bought this home I was informed the tankless water heater and air conditioning were rental items. I didn't think about this too much because I’ve had rentals in the past without too many issues," said Santokie.

Santokie said she was paying $187.61 each month to rent the two items and decided that she wanted to buyout the contract.

That’s when she discovered the contract that was signed in 2019 by the previous home owner was a 15 year contract and the buyout to end her obligation was $17,000.

“I mean $17,000 to buyout the contract for the air conditioning and the water heater? I was flabbergasted," said Santokie.

Santokie's contract is with Crown Crest Capital. She found out there is a proposed class action lawsuit against the company for allegedly misleading consumers and contacted Sotos Class Actions.

Lawyer Mohsen Seddigh is with Sotos Class Actions and told CTV News “We expect that there are thousands of Ontarians who are impacted by this particular conduct that's alleged in this lawsuit."

On the Sotos Class Action website it states, “this case alleges that the defendants breached consumer protection law in registering security interests against consumers’ home title” and that “defendants registered amounts on people’s home title that had not been disclosed to consumers.”

Seddigh said a court will decide at a later date if the cases will proceed as a class actions and that a judge could decide if liens should be removed and homeowners compensated.

“There is no protection for the consumers in the way these contracts are designed," said Seddigh.

CTV News reached out to Crown Crest Capital about Santokies’s case and Jake Watson, Senior Vice President of Marketing for Simply Group, which represents Crown Crest Capital said in a statement “Crown Crest Capital (CCC) did everything it was required to do from a consumer protection perspective to ensure that the customer in question had clear, advance public notice that the water heating and AC equipment in the home she was purchasing was not owned by the vendor and, accordingly, that the vendor, on selling the property, was not able to transfer title to the equipment to her free and clear of encumbrances because it was owned by CCC; and the previous owner had entered into a long-term rental and servicing agreement with CCC in respect of the equipment, the buy-out cost for which was provided.”

“The customer’s issue appears to be with her lawyer’s failure to either (a) requisition a discharge of the Notice of Security Interest (NOSI) by the vendor, or (b) require a standard “closing adjustment” in reduction of the purchase price to enable the purchaser to buy out the contract herself and secure a discharge of the NOSI from CCC. Her claim, rather than being against CCC, is against her lawyer.”

“There is a class action that has been proposed but it is not yet “in progress”. This action has not yet been certified as a class proceeding so there is no basis for the courts to consider the merits of the allegations. We are resisting the certification of the proposed class action vigorously. However, as the matter of certification is now before the courts, we make no further comment.”

Santokie said she is willing to pay to buyout her rental contracts but feels the price of $17,000 is too high.

“I would like to be free of this contract and I want the lien removed from my home. I'm open to a reasonable buyout, but not $17,000” said Santokie.

If you need a new furnace, air conditioner or water heater be aware that long term rental contracts can be expensive and it’s often cheaper to buy the equipment. Also, if you rent equipment you could also have a lien placed on your home.