Closing on a house in Ontario in winter: the furnace isn't working at the final walkthrough. Is the seller responsible?

Start with the agreement. If your Ontario agreement of purchase and sale says the seller warrants that the furnace and mechanical systems will be in good working order on closing, a dead furnace is the seller's problem: they fix it before closing, or the two lawyers negotiate a holdback or a price reduction. If the agreement says nothing, the buyer has a lot less to work with. So when you buy in winter, get that clause into the offer, and if you find a problem at the walkthrough, raise it through your lawyer before closing, not after.

Why this matters more in winter

• Overnight lows around minus ten are not unusual in Ontario. If the furnace in an empty house stops for a day or two, pipes can freeze and burst, and a small furnace issue turns into soaked floors and ceilings.
• Sellers often move out days before closing, so nobody notices when the heat goes off.
• The final walkthrough usually happens a few days before closing. That's not much time, and HVAC technicians are booked up in winter.

Yifei likes to line the walkthrough up with the seller's move-out. On one deal the buyer walked through right after the seller moved out. With the house empty, the furnace and basement were easy to check.

Which situation are you in

One more point on rentals: since June 6, 2024, Ontario no longer allows Notices of Security Interest (NOSIs) on title for consumer goods like furnaces and water heaters, and existing ones were deemed expired. The rental contract itself still stands, so have your lawyer confirm before closing how it transfers and what a buyout would cost.

What to do if the furnace is cold at the walkthrough

1. Rule out the simple stuff: thermostat set to heat, batteries, the furnace power switch, a clogged filter, the gas supply.
2. Take photos and video, including the furnace label (model and year), and note the indoor temperature.
3. Tell your agent and your lawyer the same day. Your agent notifies the seller's agent.
4. Have a TSSA-registered contractor send a certified gas technician (Ontario requires furnaces to be serviced by TSSA-registered contractors, and you can look them up on TSSA's website), and ask for a written report and quote.
5. Before closing, your lawyer settles it with the seller's lawyer: repair, holdback or price reduction.
6. On closing day, check the heat first, then the plumbing.

For sellers: don't shut off the gas or turn the thermostat way down when you move out, and have someone check the empty house every few days.

What Yifei has seen

On one deal, the buyer's offer had a schedule with two warranties: the basement had never leaked, and the mechanicals and heating were in working order, with the seller still responsible after closing. That basement had tested high for humidity before. Yifei's advice to the seller: know your house before you sign a warranty like that, because it can follow you past closing.

On another deal it went the other way. The buyer made a firm offer, then asked for proof of the age of the roof, AC and furnace after signing. All Yifei could do was pass along what he'd heard and suggest the buyer photograph the furnace label to check the year. Those questions belong before you submit the offer.

And some sellers handle it up front. When a buyer raised attic mould and a faulty water heater, Yifei and the seller agreed to have the mould professionally treated with the invoice sent before closing, and to fix the water heater before closing.

Ask about your own situation

What your agreement says, when the furnace stopped and how many days are left before closing decide who you call and how you negotiate. Tell me about your situation and I'll tell you straight what to do. Yifei (RE/MAX), efay.ai.

Frequently asked questions

The furnace broke after closing. Can I still go after the seller?

It depends on whether the warranty in your agreement says it survives closing. If it does, your lawyer can pursue it. If not, it's much harder. The safer move is to run the heat at the walkthrough and raise any problem before closing.

Can a seller shut off the gas after moving out to save money?

Not a good idea. Burst pipes in an unheated house cost far more than a few months of gas, and many home insurance policies have conditions for vacant homes. Check with your insurer before you move out.

Sources: - TSSA: https://tssa.org/tssa-cautions-ontario-homeowners-against-hiring-fraudulent-fuels-workers - Government of Ontario, Notices of Security Interest: https://www.ontario.ca/page/notices-security-interest