I bought a house earlier in the summer and I just discovered that the furnace needs to be replaced. What are my options?

I’m sorry to hear that. I recommend discussing the matter with the real estate lawyer who assisted you with the purchase. If you believe the seller’s representative misrepresented the condition of the furnace or the property either to you or your real estate salesperson, speak to your lawyer and contact RECO to let us know.

Whenever you buy a home, you should exercise your own due diligence. That means working with your salesperson to ask the right questions, carefully examining the property, and requesting copies of receipts, service logs and inspection reports for items such as furnaces and central air conditioning units, and never treating a pre-closing visit as a casual walk-through. It’s your opportunity to determine that nothing was broken or damaged, and the appliances and major systems work as you anticipated.

Remember: it’s up to the buyer to identify easily observable problems (patent defects) with a property. It’s also your responsibility to know for certain which items are actually included in the sale before you sign the Agreement of Purchase and Sale (APS).

Many buyers are surprised when they take possession of their new home and discover that the seller removed the brand-new stainless steel kitchen appliances. Or they’re shocked to learn that some of their home’s major features, like the furnace, or the hot water heater or even the entire HVAC system were actually rented or leased, and they must sign new, or assume existing agreements with the utility company.

These items can be fixtures or chattels. Chattels are moveable possessions that do not constitute part of the land or building associated with a property. Fixtures are chattels that have become attached to the land or buildings on the land to the extent that they become part of the land.

Generally, all fixtures are deemed to be included in the APS unless they’re specifically excluded, but the law relating to the distinction between chattels and fixtures can be confusing and often depends upon particular facts. A home’s furnace may be considered a fixture since it’s attached to the home and can’t be easily removed without damaging the property. If the furnace is rented however, it may be considered a chattel that is owned by the leasing company. When I bought my current home, the former owner wanted to take a number of light fixtures. I didn’t particularly like them, so I agreed.

When you’re ready to make an offer, it’s best to be specific. Your salesperson can help you by clearly identifying in writing which items are included in the sale of the property. If you’re taking over leased or rented items, your salesperson should ask for copies of the rental or lease agreements.

If you have a question for Joe about the home buying or selling process, please email askjoe@reco.on.ca.


Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

 

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