Click this link for the Canlii Decision for Balagula v. Ontario Consumers Home Services which is the Divisional Court decision dated September 13, 2018: https://www.canlii.org/en/on/onscdc/doc/2018/2018onsc5398/2018onsc5398.html?resultIndex=1

The facts in this matter are that an Ontario consumer signed two HVAC rental agreements on November 12, 2015 for a carbon filter and an air conditioner. The carbon filter was $49.99 plus HST per month while the air condition was $79.99 plus HST per month for a term of 10 years. The Ontario consumer sold his house in July 2016 but discovered that the HVAC rental company and/or a third party financing company placed two liens (Notice of Security Interests) on the home. The HVAC rental company forced the Ontario consumer to pay $17,334.09 to buy out the ongoing HVAC rental agreements and to discharge the liens.

The Ontario consumer initiated a Small Claims Court action to get back the $17,334.09 along with legal costs. To make a long story short, Deputy Judge Gannage of the Small Claims Court decided that the HVAC rental company had to pay back the $17,334.09 along with costs of $2,300. Deputy Judge Gannage’s most important findings were as follows:

• Although the Ontario consumer signed the contracts, he did not consent to onerous terms that were set out in small print on the back of the HVAC rental agreements

• The Deputy Judge found that the terms were unclear and confusing and did not make it clear that this was a “rent to own” HVAC agreement

• The Deputy Judge found that the buyout formula was “far from clear”

• The Deputy Judge found that the HVAC rental agreements were contracts of adhesion and that the HVAC rental company failed to bring the Ontario consumer’s attention to the onerous terms of the contract, which the HVAC rental company was obligated to do

The HVAC rental company appealed the Small Claims Court decision to the Divisional Court. Justice Conway of the Divisional Court upheld the Small Claims Court decision and ultimately found that the HVAC rental agreements contained onerous terms that an Ontario consumer would not reasonably expect. Specifically, the court found that clauses in the HVAC rental agreement related to registering a lien on title and the buyout clause were onerous. Due to the fact that the onerous clauses were not pointed out to the Ontario consumer before the HVAC rental agreement was signed, the onerous clauses could not be relied upon by the HVAC rental company. Accordingly, the HVAC rental company had to pay to the Ontario consumer $17, 334.09 along with Small Claims Court legal fees of $2,300 along with legal costs at Divisional Court of $3,500.

There is an ongoing legal battle between Ontario Consumers and HVAC rental companies. In this instance the Ontario consumer won and in the process created precedent setting case law that further assists other Ontario consumers going through the same legal problems.

If you have any further questions regarding the legal process please feel free to contact Langer Law at (647) 926-4704 to schedule a consultation.

This blog is for educational and informational purposes only and does not constitute legal advice. Results of cases described on this website may not be typical and are not guaranteed. The accuracy of the blog posts is not guaranteed. Contacting Langer Law or using this website does not create a lawyer-client relationship.

The post HVAC Rental Agreements: What do the Courts think? appeared first on Langer Law.

The following HVAC equipment have been rented to Ontario consumers with problematic HVAC Rental Agreements:

• Furnaces;
• Water heaters;
• Water filtration systems;
• Water softeners;
• Water treatment devices;
• Electronic air cleaners;
• Air purifiers;
• Air cleaners; and
• Air conditioners.

Duration of Payment Term

The HVAC Rental Agreements that impact most Ontario consumers tend to be 10 years in duration. This means that $80.00 per month for a water softener turns into $960 per year and $11,520 in monthly payments after 10 years. If the Ontario consumer is renting multiple pieces of HVAC equipment, the amount payable over a 10 year period as outlined in the below chart can become astronomical.

A troubling aspect of these HVAC rental agreements is that Ontario consumers may not even know what they agreed to, how much they have been paying, or how long they have agreed to pay for the HVAC equipment. This problem is aggravated when the HVAC rental companies attempt to collect the full value of the 10 year contract if the Ontario consumer attempts to cancel the HVAC agreement.

Lien on your House

These HVAC agreements tend to include a clause that allegedly allows for either the HVAC company or an affiliated financial company to place a lien or Notice of Security Interest (NOSI) on the consumer’s home. The amount of the lien can be variable as there is no clear formula in the HVAC rental agreement but it usually is equivalent to the full amount owing for the entire duration of HVAC agreement. If the Ontario consumer has more than one piece of HVAC equipment, they will have multiple liens on their property.

Anyone who believes they might have been impacted by a HVAC rental agreement and wants to check whether there are previously unknown liens registered on their property can request a Parcel Register from Service Ontario. This can be done by paying a nominal fee online.

What can an Ontario Consumer do?

This is a non exhaustive list of potential steps that an Ontario Consumer can complete to determine the extent to which they have been potentially impacted by a HVAC agreement. This list should not be construed as legal advice.

1. Attempt to find all documentation provided to you by the HVAC company including the HVAC rental agreement (if a copy was given to you).
2. Contact Service Ontario to purchase and review a Parcel Register to determine if liens were placed on your property by either the HVAC company or an affiliated financial company.
3. Contact Enbridge or your energy provider to dispute third party charges on the monthly bill.
4. File a consumer complaint online with the Ministry of Government and Consumer Services.
5. File a consumer complaint online with the Better Business Bureau.

If you have any further questions regarding the legal process please feel free to contact Langer Law at (647) 926-4704 to schedule a consultation.

This blog is for educational and informational purposes only and does not constitute legal advice. Results of cases described on this website may not be typical and are not guaranteed. The accuracy of the blog posts is not guaranteed. Contacting Langer Law or using this website does not create a lawyer-client relationship.

The post Inherent Problems with HVAC Rental Agreements appeared first on Langer Law.