When making an Offer to purchase a home, the Buyer agrees to assume all rental contracts. It is important to confirm what items are included and the monthly rental amounts + tax.
It is not uncommon for the Hot Water Tank to be a rental, but the age of that Hot Water Tank can impact a new homeowner’s ability to acquire insurance.
If the rental Hot Water Tank is older than 15 years, the Buyer may request the Seller have a new one installed prior to closing, in order to be able to get insurance. If the current tank is owned, the Buyer and Seller may need to sign an amendment stating that a new rental tank will be installed and the rental contract will be assumed by the Buyer upon closing.
If the Buyer wants to eventually purchase and install a more energy efficient tankless hot water heater, they will have to buy out the existing Hot Water Tank rental contract. The age of the existing tank will dictate the balance to be paid out. Check with the provider to confirm the amount, so you can budget accordingly.
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