Water, water everywhere, causing problems for homeowners

July 31 2011 by Ellen Roseman

Quite by accident, not deliberately, I wrote three columns in a row about water and its potential to create headaches for homeowners.

The first was about how a household’s water bill can jump from a few hundred to a few thousand dollars for mysterious reasons. The city water department washes its hands of the problem, so to speak, and leaves it up to the homeowner to find the leak and plug it up.

The second was about how a home inspection firm can miss water damage if it’s hidden behind a wall and has no visible signs. I spoke to a home buyer who had to spend $5,000 to replace mould damage in a bathroom after his home inspector gave it a clean bill of health. He got a refund of the fee, but nothing else to help with the repair cost.

The third was about how door to door sellers can scare homeowners into replacing their water heaters by saying they’re unsafe or inefficient, while pretending to work for an energy supplier. These new water heaters come with long-term contracts, which can trap later owners of a house into paying hefty fees to buy their way out.

All three columns, as usual, sparked some discussion among readers. I’m attaching a few comments below.

Apologies to readers for not posting anything new here for a long time. A combination of hard work and hot weather kept me away from the keyboard. I’m still committed to keeping this blog going and hoping to write more frequently in future.

24 comments

  1. GC

    Jul 31 2011

    I too was inveigled (I’ve never had opportunity to use that word) by National Home Services, Water Heater Division, with a 15 year contract.

    I am now 85 and am concerned as to what happens when my house must be sold.

    Also, when I phoned to inform them that there are dirty specks in my hot water, I was told it will cost me $90 to have a service call.

    I know it’s my fault to be taken in by a slippery tongue and I’m too embarrassed to tell my family, lest they think it’s time for the home.

    ———————————————————–

    Thank you, Ellen, for intervening on my behalf with National Home Services.

    They will reportably make some concessions for me.

    Your good advice in the Star is helpful to many, I’m sure.

  2. SL

    Jul 31 2011

    I read your article with interest on the hot water heater scam. My mother-in-law, unfortunately, has run into MorEnergy and has asked for my assistance.

    They have replaced her water heater unnecessarily with promises of a monthly reduced rental payment. The reduction was a $10/month rebate, based on gas and electrical services ordered.

    The water heater selected for her was the most expensive on their list (50 gallon direct ventilation). The water heater installed was a 40 gallon version at the same price.

    Even with the rebate, her contracted savings would have been negligible. Unremorsefully, they had advised a senior citizen and stroke victim into a 5 year contract!

    Sometime last year, the rebate payment was switched from a reduction in the Enbridge bill to a monthly rebate cheque. My mother-in-law has no recollection of any notification.

    The cheques sent so far total $30 on at least 10 months of Enbridge bills. It is now her responsibility to go after the funds and they have been less than forthcoming in helping her out.

    It looks like MorEnergy’s sole purpose is to build up a permanent rotating fund of cash supplied with Enbridge’s help and unsuspecting or helpless customers.

    I was surprised that Enbridge would associate itself with these types of organizations and in effect enforce the unfair treatment of their elderly customers.

    Is any group or agency working on restricting this practice? I’m surprised it is legally permitted and would like to get it stopped.

    Before your article I thought this was an isolated instance but obviously it is a wide spread problem for our elderly that our family has unfortunately experienced first hand. Keep up the good work.

    ———————————————————-

    ER’s response:

    Hi Scott, you can file a complaint with the Ontario consumer ministry, 416-326-8800:

    http://www.ontario.ca/consumerservices

    You can also try the Better Business Bureau, http://www.mwco.bbb.org/BBB-Mission/

    Here’s company info below from the BBB.

    MorEnergy Services Inc.

    Phone: (866) 237-7270 ext 221

    119 Westcreek Dr., Woodbridge, ON L4L 9N6

    service@morenergy.ca

    http://www.morenergy.ca

    Rating: D

    On a scale of A+ to F

    BBB rating is based on 16 factors.

    Factors that lowered MorEnergy Services Inc.’s rating include:

    · 40 complaints filed against business

    · 10 complaints filed against business that were not resolved.

    Factors that raised MorEnergy Services Inc.’s rating include:

    · Length of time business has been operating.

    · Response to 40 complaint(s) filed against business.

    · BBB has sufficient background information on this business.

  3. LLC

    Jul 31 2011

    Just wanted to thank you for your article in the Star about water heater sales people.

    At the beginning of June, I was a little distracted preparing for my son’s wedding (well, that’s my excuse!); Someone came to my door and with a sense of urgency said that she had to check my water heater right away..

    They were going to be in my neighbourhood and I HAD to sign this so that my water heater could be replaced.

    This person did have I.D. and I let her into my furnace room (which I should never have done). She told me that my water heater was very old and rusty.

    Thank goodness, I had the presence of mind to say that I would want to check with Enbridge first to ascertain the age of the water heater as I felt it had been replaced fairly recently when our furnace was replaced. (This is exactly what had happened.)

    She was not at all happy – kept pressuring me – but I held firm, saying she could leave her number and I’d call her if I decided to go ahead. She reluctantly left.

    So again thank you for raising awareness of this scam.

  4. CW

    Jul 31 2011

    I work from home and get one of these door-to-door people about once a week.

    I dispatch them without letting them in because we have a good water heater and it needs no inspection.

    However, I am new to Canada and have a question — why do people rent hot water heaters?

    Where I am from (Florida), everyone owns theirs, and they last decades. Why do people rent them instead?

    Is there something about Canadian water that ruins the heaters?

    ———————————————————–

    ER’s response:

    Ontario’s gas and hydro utilities did a great job persuading people to rent water heaters. There’s no reason why renting is better. In fact, it’s more expensive.

    Check my column about buying our your rented water heater:

    http://www.thestar.com/business/article/830171

  5. RV

    Jul 31 2011

    I moved into a fix-it house in December 2007 that contained a water heater. I started receiving bills from Direct Energy within a month, addressed to the previous owner. I sent them to the lawyer.

    Within a month, I started receiving bills specifically addressed to me for rental of that water heater in that location.

    Not sure how they got my name, since neither I nor my lawyer gave it to them, I did not pay the bills. Since I could not contact the previous owner of the house, I did some of my own investigating.

    I obtained the serial number of the water heater to which the bills applied from Client Service at Direct Energy, before they figured out that I had issues with them.

    I compared that number to the one on the tank. They were not the same number (9 digits vs. 15 digits), nor even the same description (60 Litre tank vs. 80 Gallon tank!).

    I found the maker of the tank in my house and received manufacturing date and information that matched the matchine I had.

    Meanwhile the water heater in the house failed and I replaced it with a purchased propane powered machine that should last 30 years and pay for itself in less then ten.

    IMO, water heater rentals – especially electrical ones – are a scam.

    Direct Energy threatened me with lawsuits, loss of my house and eventually sent a collection agency after me as well. The whole mess caused considerable stress.

    The interest continued to add up as the bills came in, but I refused to pay.

    It took a cease and desist letter from my lawyer (costing less than what the interest was adding up to) to stop the clock on the interest payments, and then about 3-4 months for the phone calls from the collection agency to stop.

  6. TL

    Jul 31 2011

    Carson Dunlop inspected a house for one of my client a while back. I saw the report, which was fairly comprehensive in a binder.

    These consulting companies usually send in someone with an engineer credential. The credentials help to overwhelm a customer and steam roll over any doubts, but I think the engineer is actually at a significant disadvantage when trying to look for problems, compared to an experienced tradesman.

    I am an electrician (one of my trades) and I know enough about plumbing and other trouble spots that I can give a good run for the money compared with home inspectors.

    I know where the short cuts are found in the 2 main fields. Just look at the general style of plumbing fixture and you can tell how long ago was the last renovation, if any.

    The contracts have lots of holes, a necessity for survival. If you’re in business long enough, someone may complain that you may have made a mistake.

    The only bad part is that the holes in the contracts also protect the bad inspectors.

  7. DH

    Jul 31 2011

    When house owners go on vacation or down south for a few months, do they not think to shut off the water where it comes into the house?

    Usually there is a shut off valve before the water meter. Whenever we go away, even for a few days, I shut off the water and also shut the valve to the hot water tank.

    It has been known for a tank to start leaking and spill water all over the basement floor.

    When we stayed in a small town, some kids got the garden hose, put it through an open basement window and
    flooded the whole place.

    Thank you for the tip for the food colouring in the toilet tank. And keep up the good work you do.

  8. TB

    Jul 31 2011

    Our water bill has gone through the roof too in the last year.

    The guy at Toronto City Hall described our water consumption as “like a family with 10 children, each taking a long shower every day”.

    We are a total of three and we don’t have a lawn that we water.

    All of these huge water bills (not just ours, but across the city) have happened after the change to the new meters.

    Is it all of us suddenly doing something wrong or is there an issue with the city and its new water metering?

  9. Rakesh

    Jul 31 2011

    On June 7th, I legally took possession of a home, whose sale was originally negotiated and finalized in February.

    At the time of signing, the sale and purchase agreement indicated that the water heater was a rental unit belonging to Direct Energy.

    Understanding that Direct Energy’s Water Heater portfolio featured no exit fees, I proceeded with the sale and was comfortable with this arrangement.

    Shortly after taking possession of the home, I considered a complete kitchen renovation. During the initial planning for this project, my engineer informed me that a chimney stack needed to be removed.

    This would mean a venting change for the existing water heater, since it was a conventional unit that required to vent through a liner via the chimney stack.

    My engineer informed me that I would require a power vented water heater, which directly vented to the outside with no need of a vertical liner or chimney.

    I called Direct Energy and asked to change from a conventional unit to power vented unit. To my surprise, Direct Energy informed me that their tank was returned to them on June 2nd. I saw there was now an Enpure water heater at my residence.

    I contacted Enpure and was informed I couldn’t change the water heater since it carried a 10 year term.

    I said I had not signed a contract, but they indicated that the previous owner signed the agreement on May 27th, 2011.

    I contacted the previous owner, who said they didn’t sign a contract with any “new” company. A door to door rep from Enbridge did show up and changed the water heater since “the old one was very old”.

    They were not informed that the seller represented a different company or that any contract was involved.

    I’ve contacted Enpure and spoken to several individuals, who stated that they had a signed agreement and that I was locked in a 10 year contract that I couldn’t break since 10 days had elapsed.

    I could buy out the tank for $1,050 plus HST!

    In order to avoid hassle, I considered staying with the Enpure’s rental water heater, but I requested a change from conventional to a power vented unit in order to satisfy my renovations engineering needs.

    I was given the option to do it for a fee of $300 plus HST!

    Enpure initially informed me that they had no problem sending me a copy of the signed agreement. However, they later refused to provide a copy of the agreement.

    I believe business relationships need to be earned by both parties, the business and the customer. I feel I’ve been treated very unfairly by Enpure.

    I have no confidence and do not wish to deal with this inflexible company.
    To summarize:

    · Purchase agreement indicates Direct Energy is the water heater provider

    · Previous Owner claims Enpure’s door to door representative misled them

    · Refusal to provide signed agreement

    · Inflexible position on a reasonable resolution

    I hope this story helps others and builds awareness of what’s happening in our marketplace.

  10. TD

    Jul 31 2011

    I find it unbelievable that a home inspector would not knock the tile walls to listen to hollow sounds versus a thud.

    A hollow sound indicates a deterioration of the back up to the tile and in some cases the tile would actually come loose.

    I know this because we manage many rental apartment buildings. And while inspecting the tub surrounds on tenant turnover, that is what we do.

  11. Another home inspector

    Jul 31 2011

    I use a moisture meter that reads 1.5” deep, but the home inspection associations do not call for moisture checks.

    Many times, I find high moisture readings. And in the few cases when my client purchased the home in spite of the high moisture, they have found mould and rotten framing behind the tile.

    If you are writing articles to inform home buyers, maybe you could recommend that they ask the inspector if he does moisture and CO tests. If not, go to the next guy until you find one that does these tests.

    Exterior walls are more prone to moisture build up because of the condensation within the wall when the vapour barrier is not perfectly sealed.

  12. Real estate agent

    Jul 31 2011

    I don’t trust home inspectors very much. I used a firm once that said the roof was good for 5 to 10 years. It lasted 3 months.

    There were other problems too. We got the money back but it was very unsatisfactory. The cost to pursue it through the courts is too high.

    I was a renovator, so my clients get a mini inspection for free.

    In the inspectors’ defense, it is very difficult for someone to walk into a property and find the problems that might be there.

    Also, if you hire an inspector, you should hire them yourself. One client bought a house with another agent. The agent recommended an inspector who found no problems. There were plenty.

    I met the owner, who told me about the situation. I found that the agent went by her maiden name and the inspector was her husband! Just maybe a bit of self interest there.

    I sold the house for that client, who was very happy to say goodbye to it. She had fixed all the problems.

  13. Another home inspector

    Jul 31 2011

    Based on my experience, it is entirely probable that the “tile bulge” was not visible at time of inspection and that the condition worsened during the 3 months prior to move-in.

    I handled a case in small claims court a number of years ago similar to this. The vendor had tiled over the original tile job after stabilizing the old tiles with a combination of glue and a wall repair compound.

    This lasted about 10 months after move-in, until the ceiling of the kitchen below caved in.

    The repair revealed that the studs had rotted away behind the original tile job and it was my testimony that whoever did the tile job prior to the sale knew exactly what they were doing and that the repair would eventually fail.

    Such a condition could be defended on the basis of an unforeseen or hidden condition.

    Also, the $5,000 repair likely only represents about 1% of the value of the home, not an unreasonable amount for a home in that price range.

    Buying any home, particularly a resale of age, without some provision — say 1-3% of the sale price for unforeseen repairs — is in my opinion very naïve.

  14. JM

    Jul 31 2011

    Here’s the best part of a home inspection that I have discovered over the years.

    I recently purchased a lovely oceanfront condo in Fort Lauderdale, Fla., and called in a home inspector.

    The report covered a lot of things that I knew, but also it outlined some things that even the home inspector could not pinpoint about he extent of the problem (that is, a leak from the shower).

    The inspection cost me $250, but in the end I negotiated a $4,000 credit and the repairs ended up costing me less than that amount.

    The dollar amounts that home inspections project for repairs are USUALLY much higher than the actual repair.

    In our case, the repair for the balcony door was $1,100 and we did it ourselves for less than $100.

    So, my advice is to use the inspection as a great bargaining tool.

  15. bylo

    Aug 2 2011

    Re Rakesh Kumar Verma and “The previous owner had signed with Enpure on May 27, since he thought he was dealing with Enbridge. He wasn’t told that a contract was involved.” this should have been disclosed in the Agreement of Purchase and Sale:

    6. RENTAL ITEMS: The following section deals with items that are not included in the purchase price because they are currently being rented. An example is a hot water tank that is being rented from a utility company. Other examples but by no means a complete list are alarm systems, furnaces, water softeners, air conditioners are but a few. Care should taken to ensure that all the rental items are detailed here.

    6. RENTAL ITEMS: The following equipment is rented and not included in the Purchase Price. The Buyer agrees to assume the rental contract(s), if assumable: _____…

    It seems to me that Verma has recourse against the seller if the rental wasn’t disclosed in paragraph 6. of the agreement.

  16. Frances

    Aug 4 2011

    Whenever we are absent for any length of time, we turn the water off at the meter. We learned this from my parents who, many years ago, had a water leak while they were away.

    If you suspect a leak, you should watch the meter for a short time when you are not using any water to see if it registers any usage. If so, you should start by checking all the toilets.

  17. bobsuruncle

    Aug 6 2011

    “Also, if you hire an inspector, you should hire them yourself. One client bought a house with another agent. The agent recommended an inspector who found no problems. There were plenty.”

    Never use an inspector recommended by a RE agent, mortgage broker or anyone else with a vested interest in the sale of that house. Get your own inspector who has no ties.

  18. Sarah

    Nov 9 2011

    Water damage is hazardous. It is the worst thing that can happen to a home owner and the worst thing about it is that sometimes it is not detectable.

    We had to change our entire house wooden floor THREE times in three years because the parquet kept turning dark and soft due to an unknown water leakage, and every time we change it, we’d think we found the leakage source, but it happens again.

    Turns out, at the last time, that the workers hit one of the air conditioning pipes under the parquet with nails, causing the water to leak slowly through it.

  19. DS

    Dec 6 2011

    I am a new homeowner, and have been having an issue with the water heater rental company.

    Before I moved, I was given no information about the water heater from the previous owner, and on moving, nothing from the rental company.

    On receiving my first gas bill, which included the water heater rental, I started asking some questions of the rental company. They claimed that I had signed a contract with them (never even saw one!).

    Then they claimed that I was sent an ‘assignment agreement’ via my lawyer (never happened). And now they say that I have essentially agreed to the rental because I paid my gas bill.

    I guess the moral of the story is to find out before you move… but any advice from anyone would be really great!

  20. starlite

    Dec 19 2011

    We were also the victim of a gas market scam. We contacted the Ontario Energy Board and they found the marketeer guilty of wrong doing and we were able to void our contract with them and got our money back. Here’s their web address, but make sure you have all your bills

    http://www.ontarioenergyboard.ca/OEB/

  21. Laxmi

    Sep 6 2012

    I wish I had read your column two months ago.

    I fell for the Enpure scam because he swore his company had been hired by Enbridge to service or replace any tanks.

    I asked him repeatedly if he was from Enbridge and he said yes. So I trusted him. He showed me Enbridge papers and told me that I could sign the contract and still back out, since it was just a service order.

    When the guys failed to show up on the service date, I had my chance, but he called to apologize and told me he’d have someone come over right away.

    Two days later, they installed what is now a lesser water heater. I have problems with my hot water supply and I am so mad at myself for being so stupid.

    The worst part is that I have a contract that says one day and they claim that my contract starts two days later.

    I signed it without reading, even though I’ve been told a thousand times that you must always read your contracts. I signed because he told me it was just a work order….and i believed him.

    Well, at least I’ve completed 2 months of my 10 year sentence for stupidity.