A $17M settlement has been reached in a lawsuit over HVAC equipment. Here is who is eligible.

The Ontario Courthouse in Toronto is photographed on Monday, May 2, 2022. THE CANADIAN PRESS/Christopher Katsarov

Customers who leased HVAC equipment from five Ontario-based companies are running out of time to apply for compensation as part of a $17-million settlement.

The Ontario Superior Court of Justice approved the settlement as part of a class action lawsuit against Crown Crest, Simply Green, Utilebill, Sandpiper, and HCSI in February and lawyers began processing claims from customers in June.

As part of the settlement, the companies made no admission of liability, wrongdoing or fault. The deadline to submit a claim is Oct. 2.

Here is everything you need to know about the settlement:

Who is eligible for compensation?

Compensation is meant for customers anywhere in Canada, except for Quebec, who have leased HVAC equipment from one of the five companies between July 17, 2013, and Jan. 15, 2025.

Officials estimate that as many as 40,000 customers could be eligible.

Equipment includes furnaces, air or water filters, air conditioners, or water heaters.

What does the settlement involve?

The settlement agreement, approved by the Ontario Superior Court of Justice, includes a $17-million compensation component and a commitment to cancel some ongoing leases.

Officials say that the settlement “provides relief for class members in different ways, and not all class members will receive the same relief.”

According to court documents, some class members “will receive cancellation and arrears forgiveness of $13.5 million worth of ongoing leases and the gifting of the leased equipment to the class member without further payment or obligation.”

A permanent cap of 3.5 per cent will also be applied to the annual escalation of lease payments held as of Nov. 1, 2024, while contractual buyout or termination fees will be reduced by 25 per cent.

Customers who have already paid to withdraw from their lease are eligible to receive some or all their money back under the settlement.

The plaintiffs, Sotos LLP, add that anyone who faced challenges over their lease can request a cancellation.

Mohsen Seddigh with Sotos Class Action, tells CTV News the use of liens or registered Notices of Security Interest (NOSI), on homes, and the failure to disclose that information to consumers, rendered the leases unlawful and unenforceable.

“People would face the prospect of paying sums that they did not get full disclosure of at the outset, when they needed to sell their home, refinance their home, and at other times, whenever they needed to deal with the title,” he said.

Part of the settlement means that any lease across the country impacted by the lawsuit will be NOSI or lien-free, Seddigh explained.

Another benefit from the settlement includes cash compensation for people who had to pay to remove NOSIs, by paying what is known as a buyout sum.

The settlement also addresses the cancellation of a lease up to a certain budget.

The documents state that the companies have agreed to select those leases “based on the length of default by the class member as reflected in their internal records.”

“As part of the settlement, the defendants agreed to cancel a series of leases, up to $11.5 million in total,” he said. “We have a $2-million budget to also cancel some cases.”

Seddigh said that’s intended to help people who may have been targeted because they were elderly or part of a vulnerable population.

When is the claim deadline?

The deadline to submit a claim is Oct. 2, 2025, through the official claims portal.

More information about the class action and settlement is available through the law firm’s website. Those affected can also call the claims administrator at 1-833-419-4822.

Why was the lawsuit filed?

The lawsuit was initially filed on behalf of Toronto residents Goren Donev and Alga Bonnick. It alleged that Crown Crest Capital Management Corp., along with at least 11 other companies run by CEO Lawrence Krimker, all breached Ontario’s Consumer Protection Act by not telling their rental customers that security interests worth thousands of dollars had been taken out against their home titles. The suit also claimed that the companies’ sales representatives sold the contracts on a door-to-door basis, a practice banned in Ontario in 2018.

Predatory practices are prevalent in the home equipment industry, Seddigh said, where lenders can stand to benefit from placing costly security interests on titles. Homeowners are often left with little choice but to cover the sums.

In June 2023, a representative from Crown Crest told CTV News Toronto in a written statement that it was aware of the claims against its corporation and “a senior executive”.

“We expect it will be dismissed,” the statement read at the time. “We practice transparency and compliance with consumer protection laws and have processes in place to ensure our customers are satisfied and well served.”

CTV News has reached out to Crown Crest, Simply Green, Utilebill, Sandpiper, and HCSI for comment but has not received a response as of publication.

With files from Abby O’Brien