Why Rental Items Can Complicate Real Estate Transactions
When you’re preparing to sell your property, it’s easy to assume that everything inside the home belongs to the seller. However, that’s not always the case. Items like hot water tanks, water softeners, security cameras, or even digital locks may be rented rather than owned.
Failing to disclose and properly transfer these rental items can lead to legal disputes, added costs, or delays in closing. Buyers have the right to know exactly what they’re agreeing to—and sellers have a responsibility to clearly identify rental contracts.
Step 1: Identify All Rental Items in the Property
Before listing the home, do a thorough review to determine if any equipment is rented. Common examples include:
- Hot water tanks
- HVAC systems
- Water softeners
- Alarm systems and security cameras
- Digital locks
📌 Pro tip: Don’t rely on assumption—check your utility bills or rental contracts to confirm.
Step 2: Disclose in the Agreement of Purchase and Sale
One recent example was the property at 2877 Elgin Mills Rd E, Markham. In this case, In Ontario, for example, rental items must be disclosed in Section 6 of the standard Agreement of Purchase and Sale. This section explicitly states:
“The Buyer agrees to assume all rental contracts listed below.”
If you don’t list them here, the buyer is not obligated to take over those contracts, and you—the seller—may be on the hook to pay them off before closing.
✅ In a recent transaction, I helped my client disclose and itemize:
- Hot water tank
- Water softener
- Security camera system
- Digital smart lock
Because we listed all of these under Section 6, the buyer legally agreed to assume them—avoiding last-minute surprises.
Why Proper Disclosure Protects Both Parties
Disclosing rental items isn’t just a formality—it’s a legal and financial safeguard:
- Avoids future legal disputes or miscommunication
- Ensures the buyer knows ongoing monthly costs
- Keeps the transaction smooth and transparent
Buyers often use tools like a mortgage calculator or search terms like how much house can I afford, so it’s important they understand the total monthly financial picture—including rental items.
Don’t Risk a Deal Falling Apart—Disclose Everything
As a seller, your job is to provide full transparency. Don’t assume buyers know what’s rented. Instead:
- Ask your real estate agent to walk you through the Agreement of Purchase and Sale
- Identify and confirm rental contracts in advance
- Clearly list them under the rental section in the offer
Work with Leo Shiu: Precision in Every Transaction
Real estate transactions require accuracy and experience. Leo Shiu, a top-tier Toronto Listing Agent, fluent in eight languages and backed by a team of 100+ agents, ensures every contract detail is reviewed and disclosed properly. Whether it’s rental equipment or a custom clause, Leo ensures nothing is overlooked.
📞 Selling your home? Don’t guess—sell smart. Contact Leo Shiu today to make sure your sale is legally sound and hassle-free.