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(CBC)   Considering a home heating contract where the contractor owns your HVAC equipment? Oh, when you try to sell your home, the new buyer must apply for credit to the HVAC company, 'cause you don't own the equipment. This sounds like a very bad idea   (cbc.ca) divider line
    More: Sick, Security interest, Lien, Mortgage, HVAC, Property, Consumer protection, Mechanic's lien, rental contract  
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3254 clicks; posted to Main » and Business » on 20 Apr 2021 at 12:41 AM (3 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2021-04-19 8:56:36 PM  
Sounds about as stupid as BMW's plan to lease you functionality for components already built into a car.

Want heated seats, lane departure warnings, and Bluetooth?  That'll be $25 a month, TYVM.
 
2021-04-19 9:09:15 PM  
Having someone else own a chunk of your house usually at least gets you sex.
 
2021-04-19 9:30:19 PM  
Solar panels are done like that in some places; Las Vegas comes to mind.
 
2021-04-19 9:37:37 PM  
Sounds pretty dodgy to me. But then liens are virtually unknown in the UK so the idea that anyone can just file a claim on your house sounds nuts.
The nearest thing to this I can think of is a few years ago when companies sold solar panels and fitted them but you had to sign a contract that meant you had to stay with that supplier for a fixed term, and if you sold your home the new owner had to agree to take on the deal.
 
2021-04-19 9:49:15 PM  
Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.
 
2021-04-20 12:50:13 AM  
When Mrs.Frink and I bought our house, we made damn sure to redeem the ground rent to go along with it.
 
2021-04-20 12:52:03 AM  
Uh, no. That sounds rather bad in fact.
 
2021-04-20 12:52:15 AM  

BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.


How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.
 
2021-04-20 12:53:17 AM  

Prof. Frink: When Mrs.Frink and I bought our house, we made damn sure to redeem the ground rent to go along with it.


Does "ground rent" exist anywhere outside of your state?
 
2021-04-20 12:55:42 AM  

Marcus Aurelius: Having someone else own a chunk of your house usually at least gets you sex.


Well she did get screwed.
 
2021-04-20 12:58:17 AM  
Sounds rather European or Canadian.

We want to be more like our enlightened brethren, no?
 
2021-04-20 12:58:40 AM  
Who owns the algae growing in the heat exchanger?
 
2021-04-20 12:59:51 AM  

fragMasterFlash: Who owns the algae growing in the heat exchanger?


All you, just like the city and the sidewalk.

They own it, all responsibility - on you.
 
2021-04-20 1:04:49 AM  

ISmartAllMyOwnPosts: fragMasterFlash: Who owns the algae growing in the heat exchanger?

All you, just like the city and the sidewalk.

They own it, all responsibility - on you.


Conservatism in a nutshell.
 
2021-04-20 1:07:18 AM  
If I wanted to pay a monthly fee to rent my own house, I'd buy a condo. Or join an HOA. Or install a security system. Or have electricity and internets and trash service. Or pay taxes.
 
jvl [BareFark]
2021-04-20 1:08:04 AM  

Enigmamf: BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.

How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.


Think of getting more efficient AC? Ooh. That's expensive.

But what if you got a loan for the new AC, and paid for it over 15 years using some of the savings you get from using less electricity? That's how solar is "sold" in many places, and it makes sense because everybody wins: homeowner gets to save on their electricity bill with no money down, seller gets to sell and install a unit, and somewhere a bank is pleased to have made a loan to somebody who has a source of money to pay back with. Oh, and the world is better because someone is using less electricity.

Whether this model works for AC is a bit sketchy in my mind: how much can you really save on AC? But at least in theory, this model could work. Not saying the linked article is a good deal, just saying it theoretically could be.
 
2021-04-20 1:08:40 AM  
Oh the sweet stupidity of letting people do whatever they want because it's in the contract.
 
2021-04-20 1:09:22 AM  

BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.


Plus, a free furnace if your old one takes a crap.

The 10 year term sounds too short by about half though.
 
2021-04-20 1:09:25 AM  

markie_farkie: Sounds about as stupid as BMW's plan to lease you functionality for components already built into a car.

Want heated seats, lane departure warnings, and Bluetooth?  That'll be $25 a month, TYVM.


Can I opt to not have those things in the car and not pay those $25?
 
2021-04-20 1:10:14 AM  

Marcus Aurelius: Having someone else own a chunk of your house usually at least gets you sex.


In 1955 now that's considered entitled misogyny or some other gaslighting crap
 
2021-04-20 1:12:36 AM  
In our previous house, we got a sales pitch from a company wanting to rent us a furnace. "But think of the benefits! You'll get free upgrades over the years!"

I knew it wasn't a good sign when the salesman was stumped when I asked, "But what if we sell the house?"

In the end, we bought a furnace outright. No rent or lease. Then sold the house the following year.

So glad I didn't have to deal with that nightmare.
 
2021-04-20 1:12:50 AM  

Enigmamf: BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.

How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.


Companies have gotten into business of taking people's money if you happen to receive anything that is a case of good fortune on your part but not really the goal of the company companies soul goal now is to part you from your money if you get anything out of it that's just a plus but not really their intention
 
2021-04-20 1:15:47 AM  

jvl: Enigmamf: BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.

How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.

Think of getting more efficient AC? Ooh. That's expensive.

But what if you got a loan for the new AC, and paid for it over 15 years using some of the savings you get from using less electricity? That's how solar is "sold" in many places, and it makes sense because everybody wins: homeowner gets to save on their electricity bill with no money down, seller gets to sell and install a unit, and somewhere a bank is pleased to have made a loan to somebody who has a source of money to pay back with. Oh, and the world is better because someone is using less electricity.

Whether this model works for AC is a bit sketchy in my mind: how much can you really save on AC? But at least in theory, this model could work. Not saying the linked article is a good deal, just saying it theoretically could be.


In Canada? I think they run their AC about 6 weeks a year at most. Now the furnace, THAT is where you could save a ton, a high efficiency heat pump that works down to -20C could potentially save you a ton, but they're rather expensive so in theory such a plan could work but somehow I don't think these bottom feeders are going door to door selling high efficiency heat pumps at reasonable rates...
 
2021-04-20 1:17:08 AM  

nytmare: If I wanted to pay a monthly fee to rent my own house, I'd buy a condo. Or join an HOA. Or install a security system. Or have electricity and internets and trash service. Or pay taxes.


You had me on the first few. But I do like having electricity and trash service. Heck I even like paying taxes knowing they're going to a public good.
 
2021-04-20 1:26:05 AM  
Ayn Rand lied.
Capitalism was never about wealth creation.
It was all about rent-seeking, and nothing else.
Rootless cosmopolitan out front shoulda told ya.
 
2021-04-20 1:27:34 AM  
Don't liens need to be satisfied before closing in Canada?
 
2021-04-20 1:27:54 AM  

robodog: In Canada? I think they run their AC about 6 weeks a year at most


Toronto is south of Minneapolis where I live, and my A/C puts in about 18 weeks a year.

I have a really low tolerance for humidity though.
 
2021-04-20 1:27:55 AM  

casual disregard: nytmare: If I wanted to pay a monthly fee to rent my own house, I'd buy a condo. Or join an HOA. Or install a security system. Or have electricity and internets and trash service. Or pay taxes.

You had me on the first few. But I do like having electricity and trash service. Heck I even like paying taxes knowing they're going to a public good.


This.
 
2021-04-20 1:33:31 AM  

Madaynun: casual disregard: nytmare: If I wanted to pay a monthly fee to rent my own house, I'd buy a condo. Or join an HOA. Or install a security system. Or have electricity and internets and trash service. Or pay taxes.

You had me on the first few. But I do like having electricity and trash service. Heck I even like paying taxes knowing they're going to a public good.

This.


I think you guys missed the point.  (Whether the point was a good one is a separate matter)
 
2021-04-20 1:58:07 AM  

edmo: Solar panels are done like that in some places; Las Vegas comes to mind.


Not entirely if what I've been told is true.

The value of the panels are attached to the house in the form of a lien or something. There's no credit check, but you do have to agree to see the remainder of the contract. Something like 20-30 years in length, but they cover all maintenance during that time.

Once those years are up, the panels are all yours, but by that time most PV panels are past their life anyways so you e go to buy new.

But figure perhaps an average $200 per month electric bill for 20 years, that's about $48,000. Assume you paid $30K, you still come out ahead.
 
2021-04-20 2:12:36 AM  
Just had my 50 year old furnace go out, tapped my HELOC to pay for a new one. It will be interesting to see what the bills are like next winter.
 
2021-04-20 2:20:13 AM  

Claude Ballse: edmo: Solar panels are done like that in some places; Las Vegas comes to mind.

Not entirely if what I've been told is true.

The value of the panels are attached to the house in the form of a lien or something. There's no credit check, but you do have to agree to see the remainder of the contract. Something like 20-30 years in length, but they cover all maintenance during that time.

Once those years are up, the panels are all yours, but by that time most PV panels are past their life anyways so you e go to buy new.

But figure perhaps an average $200 per month electric bill for 20 years, that's about $48,000. Assume you paid $30K, you still come out ahead.


How many of those solar shops will be around in 15-20 years to fulfill their maintenance obligations defined within the contract?
 
2021-04-20 2:24:46 AM  

jvl: Enigmamf: BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.

How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.

Think of getting more efficient AC? Ooh. That's expensive.

But what if you got a loan for the new AC, and paid for it over 15 years using some of the savings you get from using less electricity? That's how solar is "sold" in many places, and it makes sense because everybody wins: homeowner gets to save on their electricity bill with no money down, seller gets to sell and install a unit, and somewhere a bank is pleased to have made a loan to somebody who has a source of money to pay back with. Oh, and the world is better because someone is using less electricity.

Whether this model works for AC is a bit sketchy in my mind: how much can you really save on AC? But at least in theory, this model could work. Not saying the linked article is a good deal, just saying it theoretically could be.


So, I kind of do this stuff for a living.  check this out:

I'll even give you electricity for $0.08/kwh

1 ton cooling = 12,000 btu = 3.5 kwh
3.5 ton unit at 100% efficiency burns 12.3kwh
3.5 ton unit at 80% efficiency burns 15.4kwh

8 hours of run time a day x 30 days
12.3kwh * 8 hr * $0.08 * 30 days = $236.16
15.4kwh * 8 hr * $0.08 * 30 days= $295.68

$59.52 / mth
*12 mth = $714.24
*15 yr = $10713.60
 
2021-04-20 2:25:54 AM  
mrs bughunter is a realtor here in CA.  She says the buyer can decline the contract, and the seller is then responsible for dealing with the HVAC company and/or whoever is financing the lease before the sale can close.

It's one of those things that can totally fark up a sale.  One of the million and one things, at least one of which almost always happens.

(I told her, she needs to write a book on how many different ways the transaction of selling/buying a home can go wrong, and how to deal with it and save the deal... she's a pro at it.  She's even put up her own money to keep a deal from falling thru, just to keep at least part of the commission, instead of oh-shiat-suddenly-zero.)

Just, no.  Be nice to mrs bughunter and don't contract out the HVAC system.
 
2021-04-20 2:27:57 AM  

Yankees Team Gynecologist: Madaynun: casual disregard: nytmare: If I wanted to pay a monthly fee to rent my own house, I'd buy a condo. Or join an HOA. Or install a security system. Or have electricity and internets and trash service. Or pay taxes.

You had me on the first few. But I do like having electricity and trash service. Heck I even like paying taxes knowing they're going to a public good.

This.

I think you guys missed the point.  (Whether the point was a good one is a separate matter)


I find it a bit weird when the Yankees are lecturing anybody about missing something.

Try hitting the ball for once you overpaid people who are worse than the Mets.
 
2021-04-20 2:32:59 AM  
I don't "rent" or "lease" anything. If I want it, I'll buy it outright. The 1st time I heard of leasing a car, I imagined all I'd have at the end of the lease: a small pile of receipts wrapped in a band. At least a used car has some equity.

Nope to leasing anything. What a stupid idea. If I fell for some scam like this, my long-dead Dad would rise from his grave & slap me so cross-eyed I'd be able to stand in Wednesday & see both Sundays. Who falls for these ideas?

How can anyone hear them & think renting the seat-warmers in a Beemer Basic or the HVAC in a house is a good idea? It's just another monthly bill some dumbass would pay but not a normal person. If someone falls for crap like this, they deserve to be homeless.
 
2021-04-20 3:08:30 AM  

Marcus Aurelius: Having someone else own a chunk of your house usually at least gets you sex.


I asked about that at the bank and they were super unreceptive.
 
2021-04-20 3:08:57 AM  

arthur_toafk: Claude Ballse: edmo: Solar panels are done like that in some places; Las Vegas comes to mind.

Not entirely if what I've been told is true.

The value of the panels are attached to the house in the form of a lien or something. There's no credit check, but you do have to agree to see the remainder of the contract. Something like 20-30 years in length, but they cover all maintenance during that time.

Once those years are up, the panels are all yours, but by that time most PV panels are past their life anyways so you e go to buy new.

But figure perhaps an average $200 per month electric bill for 20 years, that's about $48,000. Assume you paid $30K, you still come out ahead.

How many of those solar shops will be around in 15-20 years to fulfill their maintenance obligations defined within the contract?


This.

I got a pitch from a company that seemed good. Sales guy said he'd been with the company for "5 years". I search their name, but no reviews older than 10 months. After some more Googling, I find the old company name and it had terrible reviews. Looked like they re-incorporated and rebranded when people started to get too pissy.

Plus, when I double checked his math, I caught that he based the "savings" on my entire power bill, which is 60% natural gas for gas appliances. Taking the gas portion out of the equation, there was no savings. Some months I might even pay more. Their financing fees jacked up the costs.
 
2021-04-20 3:16:05 AM  

ISmartAllMyOwnPosts: Sounds rather European or Canadian.

We want to be more like our enlightened brethren, no?


In some ways, yes.  But it doesn't have to be all or nothing.  You can want to emulate one thing while taking a hard pass on other things.
 
2021-04-20 4:13:57 AM  

waxbeans: Companies have gotten into business of taking people's money if you happen to receive anything that is a case of good fortune on your part but not really the goal of the company companies soul goal now is to part you from your money if you get anything out of it that's just a plus but not really their intention


Now this is what they should teach in school--not how to get a credit card.

But it'll never happen, because America.
 
2021-04-20 4:20:26 AM  

robodog: In Canada? I think they run their AC about 6 weeks a year at most. Now the furnace, THAT is where you could save a ton, a high efficiency heat pump that works down to -20C could potentially save you a ton, but they're rather expensive so in theory such a plan could work but somehow I don't think these bottom feeders are going door to door selling high efficiency heat pumps at reasonable rates...


Can you imagine  a rent-to-own place where it was not just appliances and couches, but things like your heater and your plumbing?

Or you have an apartment, but the shower is paid for by the month.  I guess it is, if you rent.

Anyway, if theres a way to make it more complicated and confusing and expensive, capitalism will find it.
 
2021-04-20 4:38:10 AM  
Don't give my boss ideas.

I leved residential hvac for a lot of reasons, but I can at least have my conscience cleared of preying on the sick and elderly.
 
2021-04-20 4:50:50 AM  

sex_and_drugs_for_ian: robodog: In Canada? I think they run their AC about 6 weeks a year at most

Toronto is south of Minneapolis where I live, and my A/C puts in about 18 weeks a year.

I have a really low tolerance for humidity though.


On a muggy July or August day, anywhere in the Golden Horseshoe region if the gates of Hell opened up people would be moving in- to Hell. Grew up right in the middle of the area, Oakville.
 
2021-04-20 5:02:41 AM  

Enigmamf: Prof. Frink: When Mrs.Frink and I bought our house, we made damn sure to redeem the ground rent to go along with it.

Does "ground rent" exist anywhere outside of your state?


I remember this as something in Trump's dad dodging estate taxes. He assigned the ground leases to his kids, so they owned the land the buildings were on. They didn't own the buildings, but owned the land. I don't know how mid century tax rules worked, but it was secondary to The Donald running a company that charged outrageous prices for services to his dad's company to transfer wealth.
 
2021-04-20 5:09:22 AM  

Lurk Who's Talking: I don't "rent" or "lease" anything. If I want it, I'll buy it outright. The 1st time I heard of leasing a car, I imagined all I'd have at the end of the lease: a small pile of receipts wrapped in a band. At least a used car has some equity.

Nope to leasing anything. What a stupid idea. If I fell for some scam like this, my long-dead Dad would rise from his grave & slap me so cross-eyed I'd be able to stand in Wednesday & see both Sundays. Who falls for these ideas?

How can anyone hear them & think renting the seat-warmers in a Beemer Basic or the HVAC in a house is a good idea? It's just another monthly bill some dumbass would pay but not a normal person. If someone falls for crap like this, they deserve to be homeless.


Leasing a commercial vehicle might make some sense when it allows you to deduct all of the lease payments as a business expense vs taking a deduction on an amortization schedule, otherwise, not so much.
 
2021-04-20 5:37:31 AM  

Marcus Aurelius: Having someone else own a chunk of your house usually at least gets you sex.


Only initially.
 
2021-04-20 5:41:41 AM  

Enigmamf: BigBurrito: Commercial cooling has worked like this for awhile. It actually incentivizes more efficient and reliable equipment.

How so? It would seem to me that the opposite would be true: The person with the incentive to install more efficient equipment is the person paying the power bill, but in the context of a heating contract, the person paying the power bill has no control over what is installed. And unless specific performance penalties are built in (which certainly doesn't seem to be the case in the home heating contract market), the heating company has no particular incentive to ensure the heat doesn't go out - they don't have to live in the unheated home.


I wouldn't be signing that unless there were seriously significant non-performance penalty clauses for the provider.  Major ones.  (Not immediately, but after a reasonable repair window yes.)
 
2021-04-20 5:46:45 AM  
The finance company I use let's me offer equipment rentals and I generally steer people away from that option just because of the  hassles when people go to sell or the anger when they get tired of making payments and of course the far greater total cost. Some landlords prefer it because they can apparently write off the rental expenses and there is no cost upfront. Less scrupulous companies love equipment rentals because they make way more money just as an example a furnace install normally billed at $4500 can be sold at $11k and the rental payments would still be lower than the finance payments which seems like a good deal if you don't read the fine print. The only reason I ever suggest a rental is if the customer can't get financed a rental is easier to get approved. If you have options though never rent this stuff it's a terrible idea.
 
2021-04-20 6:02:44 AM  

Lurk Who's Talking: I don't "rent" or "lease" anything. If I want it, I'll buy it outright. The 1st time I heard of leasing a car, I imagined all I'd have at the end of the lease: a small pile of receipts wrapped in a band. At least a used car has some equity.

Nope to leasing anything. What a stupid idea. If I fell for some scam like this, my long-dead Dad would rise from his grave & slap me so cross-eyed I'd be able to stand in Wednesday & see both Sundays. Who falls for these ideas?

How can anyone hear them & think renting the seat-warmers in a Beemer Basic or the HVAC in a house is a good idea? It's just another monthly bill some dumbass would pay but not a normal person. If someone falls for crap like this, they deserve to be homeless.


You have equity in the end of the because you're paying larger payments, and paying them for longer. Those payments add up to both the depreciation and the residual equity (plus interest). The whole idea of leasing is to only pay for the depreciation by the end of the term.

If you had a lease, and then bought a car with the same level of depreciation, you'd end up more or less on the same place as a lease. If you sell a financed car after the same number of years, you'll also end up more or less in the same place.*

I don't do it either, but I get the concept.

*theoretically, but leasing is also a bit cheaper because many companies subsidise the lease, and throw in a maintenance packages so they can get a CPO car in great shape to resell.
 
2021-04-20 6:18:13 AM  

wildcardjack: Enigmamf: Prof. Frink: When Mrs.Frink and I bought our house, we made damn sure to redeem the ground rent to go along with it.

Does "ground rent" exist anywhere outside of your state?

I remember this as something in Trump's dad dodging estate taxes. He assigned the ground leases to his kids, so they owned the land the buildings were on. They didn't own the buildings, but owned the land. I don't know how mid century tax rules worked, but it was secondary to The Donald running a company that charged outrageous prices for services to his dad's company to transfer wealth.


I've seen a few cases where a family-business is passed down to the next generation with one person being given the land vs another the business itself. It doesn't usually end well.
 
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