Is Your HVAC Secretly a Lease? What Every Home Seller Needs to Know

## The Closing Table Surprise Nobody Wants I have been at closing tables where sellers were blindsided by something they never thought to check: their HVAC system was not theirs to sell. It was leased. And the lease had to be paid off, assumed by the buyer, or transferred — right there at closing, with everyone waiting. This is not rare. It happens regularly in the Lowcountry, particularly in newer construction neighborhoods where builders partnered with HVAC companies on lease-to-own programs. If you are thinking about selling, this is one of the first things you need to verify. ## How HVAC Leases Work When a builder installs a new HVAC system in a home, they sometimes partner with a financing company that technically owns the equipment. The homeowner makes monthly payments — often bundled into a utility bill or a separate line item that looks like a service contract. Many homeowners have been making these payments for years without realizing they do not own the equipment outright. The most common programs in the Lowcountry come from companies like Enercare, Reliance Home Comfort, and several regional HVAC providers. The monthly payment is typically between $40 and $120, and the lease term is usually 10 to 15 years. ## How to Find Out If Your HVAC Is Leased Check these three places: **1. Your utility bill or automatic payments.** Look for a line item that is not your electric or gas charge. If you see a separate payment to an HVAC company, that is a signal. **2. The equipment itself.** Look for a sticker or tag on your air handler or outdoor unit. Leased equipment is usually labeled with the financing company's name and a customer service number. **3. Your closing documents from when you bought the home.** If the previous seller disclosed a lease or if there was an assumption agreement at your closing, it will be in your paperwork. ## What Happens at Closing If Your HVAC Is Leased You have three options, and you need to decide before you list — not at the closing table. **Option 1: Buy out the lease.** Most lease companies will give you a payoff amount. This is often the cleanest solution and removes the issue entirely. **Option 2: Transfer the lease to the buyer.** Some buyers will accept this, but many will not. It adds complexity to the transaction and can cause deals to fall apart. **Option 3: Negotiate it into the sale.** You can offer a credit to the buyer to cover the buyout. This keeps the deal clean but reduces your net proceeds. ## The Disclosure Question South Carolina requires sellers to disclose known material defects and encumbrances on the property. A leased HVAC system is an encumbrance — it is a financial obligation attached to the equipment in the home. Failing to disclose it is not just a deal problem; it is a legal exposure. The South Carolina Residential Property Condition Disclosure Statement includes a section on leased equipment. Fill it out accurately. ## My Recommendation Before you call a listing agent, spend 20 minutes verifying whether your HVAC, water heater, water softener, or any other major system is leased or financed. Check your monthly payments, check the equipment, and check your original closing documents. If you find a lease, call the company and get a payoff amount. Know the number before you sit down with anyone to talk about listing price. It affects your net proceeds, and you want to walk into that conversation with complete information. If you have questions about this or anything else related to selling your home in the Lowcountry, I am happy to walk through it with you.