Buying a house in Ontario in winter that heats with oil or propane: what should I check before I buy?
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The furnace is rarely the problem. Yifei's job is to put the hidden risks on the table, not to call the house perfect.
- 01Insurance: an old tank can block coverage
- 02Tank: propane often rented, oil usually owned
- 03Fuel: run dry and pipes can freeze
Yifei went to the house that evening to check. Without those two numbers, the insurance quote was stuck.
- 01Read the furnace data plate, ask for records
- 02Check the oil tank label and location
- 03Ask if the propane tank is rented
- 04Look for rust, leaks and dents
- 05Get an insurance quote during conditions
- 06Panel: 200 amps is best
Still in use? Removed? Any paperwork? In Ontario, underground oil tanks must be registered with TSSA, or fuel can't be delivered.
Call the fuel company from outside, or 911 in an emergency.
Tell Yifei what you know about the furnace, tank and insurance. He'll tell you straight what to do.
Ask YifeiCheck three things: how old the furnace is, how old the oil or propane tank is and whether it's owned or rented from a fuel company, and whether an insurer will cover the house and at what premium. Include an insurance condition in your offer and get quotes during the condition period. In winter, also check how much fuel is left, and have your lawyer spell out how the fuel in the tank is handled at closing.
Why oil and propane homes need extra checks
Most homes in Toronto burn natural gas, but in Niagara and rural areas around the GTA, plenty of houses have no gas line and heat with oil or propane. The furnace itself is rarely the issue. Three other things are:
- Insurance: insurers set their own rules about the age and location of oil tanks. An old tank may need replacing before they'll cover the house, or the premium goes up. According to TSSA, there is no age at which an approved aboveground tank must be replaced as long as it isn't leaking; the age limits usually come from insurers.
- The tank: propane tanks are often owned by the fuel company and rented to the homeowner. Oil tanks are usually owned by the homeowner, and replacing one costs money.
- Fuel: tanks drain fast in winter. If one runs dry, the furnace stops and pipes can freeze.
What Yifei has seen
On one purchase, the buyer's insurer wanted the age of the furnace and the roof. Yifei went to the house that evening to look: the furnace was made in 2011 and installed around 2015, and the roof dated from 2016. Without those numbers, the insurance quote was stuck.
Another listing heated with propane and the owner didn't live there. While showing it, Yifei checked the tank and found it running low again. The owner ordered a delivery, and Yifei went back to open the gate. A vacant propane house in winter needs someone watching the tank.
What to check during showings and the condition period
Ask hard questions about any old buried oil tank: is it still in use, has it been removed, and is there paperwork for the removal? In Ontario, underground fuel oil tanks must be registered with TSSA and fuel can't be delivered to an unregistered one, and work on underground tanks must be done by a TSSA-registered, certified contractor. If you're unsure, bring in a lawyer and a qualified contractor.
What to put in the offer
- Insurance condition: the deal depends on getting satisfactory home insurance within the condition period.
- Equipment clause: the seller confirms the furnace and heating equipment will be in good working order on closing.
- Fuel adjustment: spell out whether the buyer pays the seller for fuel left in the tank or it's included in the price, and let the lawyers handle it at closing.
- Rented tanks: open an account with the fuel company before closing so the supply doesn't stop that day.
Contractors who come out to inspect a furnace usually charge a service fee up front. One technician told Yifei's client the fee is normally waived only if you replace the whole furnace, not for regular repairs.
Frequently asked questions
What if the oil tank is too old to insure?
Negotiate with the seller to replace it before closing, or take the cost off the price. Get the insurer's requirements in writing first.
The propane tank is rented. What do I do after buying?
Call the fuel company to move the account into your name and confirm the rental fee and delivery schedule.
What should I watch for when viewing an oil or propane home in winter?
Whether the house is warm with the furnace running, how much fuel is in the tank, and any smell of oil or gas around lines and fittings. If you smell gas, get outside first, then call the fuel company from outside, or 911 in an emergency.
Tell me about your situation and I'll tell you straight what to do. Yifei (RE/MAX), efay.ai
Sources: TSSA Fuel Oil https://www.tssa.org/fuel-oil ; TSSA Fuels FAQs https://www.tssa.org/fuels-faqs ; Ontario O. Reg. 213/01 https://www.ontario.ca/laws/regulation/010213