Service contracts and warranties are written agreements. Their terms decide what happens when the house changes hands. Many owners never read those terms until the closing is behind them. This article explains how transfer and cancellation usually work in general, and what to check in the paper before the sale closes. It does not describe any company's contract. Read the document that applies to your own equipment.
What a contract usually does at a sale
Agreements tend to follow a few common patterns. Some stay with the house and pass to the next owner automatically. Some stay with the original buyer and end when the house is sold. Some allow transfer only after a form is filed, a notice is given, or a charge is paid. The transfer section tells you which pattern applies. It is usually under a heading such as transfer, assignment, or change of ownership.
What to read in any service contract
Look for the list of covered equipment, the list of exclusions, any conditions the owner must meet to keep the agreement active, the steps for making a claim, the start date of the agreement, and the cancellation and transfer sections. Read each condition as a task someone has to perform, and note who that someone is.
Questions to ask before the sale closes
Ask the seller, the listing agent, or the contract holder these questions, and ask for the answers in writing.
Does the contract transfer to the next owner, end at closing, or require action to move?
What notice, form, or approval does a transfer need, and by what date?
Is there any charge to transfer? Ask for the amount as written in the document, not a verbal estimate.
Who may cancel the agreement, and how is cancellation requested? Does the contract say how any unused portion is handled?
Does the coverage list follow the house or the equipment? If the equipment is older than the contract period, what does the document say about that?
What happens to a claim that is already open on the sale date?
Compare the paper with the planning figures
Once you know who holds the agreement, compare each covered system's age with the typical service life on its matching page, such as the gas furnace or central air conditioner page. The service life figures in the tables on this site are general planning figures. They are not a description of any contract. Use them to decide how much weight the transfer question deserves for each system in the house. The full set of ranked appliance figures is on the ranking page.