Who handles callbacks on past installs after you buy an HVAC company?
Customers may call the company you now own, so ask your lawyer who is responsible for callbacks on earlier work. Ask for the callback log and warranty records, check manufacturer registrations, and have your lawyer write down who pays for callbacks on work done before closing.
Customers may not separate the company before closing from the company after it. If a furnace installed last winter fails, they call the name on the truck, which is now yours. A buyer’s review usually looks at the maintenance book and current work. Work already finished needs its own look, because the cost of fixing it can land on you.
Start with the callback log
Ask the seller for a record of callbacks and warranty visits, with the install date, the problem and the fix. A good log shows how often past work comes back and which jobs or products cause trouble. If there is no log, ask how callbacks are tracked, and look through the service tickets with a technician you trust.
Labour warranties on past installs
Find out what the company promised customers on labour, and for how long. Ask for sample warranty wording and a list of installs still inside their warranty period. That list tells you roughly how many callbacks could still arrive and how long the exposure lasts.
Manufacturer warranty registrations
Some manufacturers require a system to be registered before their warranty applies, so check each warranty. Ask whether the seller registered each install, and whether the registrations are tied to the company’s account, which may change hands. Your lawyer can advise on how the account and any dealer status move to you.
Settle who pays in the agreement
Raise it before the terms are drafted. A buyer may ask that the seller pay for callbacks on earlier work, or that part of the price be held back until the warranty period ends. These are negotiated terms, and your lawyer drafts them. See the HVAC due diligence guide for the rest of the review.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
Buying
Selling
Financing
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentBuying a business? How to protect yourself from potential liabilities
- 03Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
- 04Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI)IndustryAbout | HRAI
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