Leased HVAC?

[TruJa]

I ran into a little issue the other day. The homeowner informed me that their new multi-zoned, high efficiency HVAC system isn't owned, but is leased. Have any of you dealt with something like this? I asked for a copy of the lease, and they couldn't (or wouldn't) provide it. I asked if there was a buyout clause, but they didn't know. They said it goes for 10 years, and includes maintenance and any service, but I'm not clear how this could work, or exactly what parts of the system are owned vs leased (is it just the furnace/AC equipment or does it include the ductwork which was modified when the system was installed). And what exactly happens at the 10 year mark? I'm just in a holding pattern right now, until I get more information to proceed. I know there has got to be a way out of the lease.

 

[Tim The Enchanter]

And if you quit paying do they send repo men to remove the system in January?
Seems doubtful.
I have never heard of leasing an HVAC system. I think you need more details.

 

[CindyR]

Ha Ha!! I've been waiting for this for years. some companies here offer this great 'never worry about any thing ever again' lease/maintenance plans but i have never encountered one on an appraisal. and i have no idea what i would do with one if i ever did. Sorry

 

[Tim The Enchanter]

For AZ they do repos in July and August.
Gotta go for the max impact.

 

[Carnivore]

You know it sounds like it is some form of UCC filing. Whereas the HVAC company actually finances the HVAC and provides servicing over the life of the filing. Something along those lines.

Public Service Gas companies have something like this. If you convert to gas they will install natural gas water heaters and furnaces and you pay extra in the natural gas bill every month for the new stuff.

BUT you need them to Clarify and show you what they are talking about. Its probably a misunderstanding by them.

 

[Carnivore]

Ha Ha!! I've been waiting for this for years. some companies here offer this great 'never worry about any thing ever again' lease/maintenance plans but i have never encountered one on an appraisal. and i have no idea what i would do with one if i ever did. Sorry

You made me think of something. If this exist then the lender will require it to be paid off because they become kind of a 2nd fiddle(2nd position). Thats a huge NO NO with them

 

[Tim The Enchanter]

It sort of sounds similar to a leased solar power system.
Except you can do fine without solar, but not w/o HVAC, which lenders will require.
Double down on the fee.

 

[Carnivore]

HERE YA GO: https://www.trustdale.com/blog/thinking-about-leasing-an-hvac-think-again

"...Recently, a new type of HVAC leasing scheme

Another one: https://www.thestar.com/business/pe...be-wary-about-that-furnace-lease-roseman.html

 

[Tim The Enchanter]

The furnace {lease} may only be $100 a month but consider what the cost will be over the entire rental period. A furnace purchase priced in the $4,000 to $5,000 range may end up costing you upwards of $18,000…

An awesome deal for the math adverse, or should I say ignorant. But but, it's only $100.

 

[CindyR]

checked the website for one and they say they are providing HVAC service. you pay a monthly fee and they make sure you have hot and cold air blowing in.