First: Is It Actually a Leak?
Before you panic, confirm what you are seeing. Many "leaks" on a wall-mounted tankless water heater are actually condensate — a normal byproduct of high-efficiency condensing units that pull heat out of the exhaust gases. A condensing tankless heater can produce a litre or more of mildly acidic water per hour of run time, and that water is supposed to drain away through a small tube. If the condensate line is clogged, kinked, or disconnected, it will pool at the base and look exactly like a leak.
True leaks come from pressurized water connections: the cold inlet, the hot outlet, the isolation (service) valves, the pressure relief valve, or an internal component. The difference matters because condensate is harmless to the unit while a pressurized leak can cause real water damage and, over time, corrode the heat exchanger. Wipe everything dry, run hot water for a few minutes, and watch closely to see where fresh moisture appears first.
The Most Common Causes
Loose or aged fittings. The threaded connections at the top of the unit loosen slightly over years of thermal expansion and contraction. In Greater Vancouver, where water is soft and slightly acidic, this is the single most common source we find.
Failed isolation valves. The two service valves (often red and blue) that let a technician flush the unit have small bleeder ports and rubber seats that wear out. A weeping valve handle or bleeder cap is a frequent culprit.
Pressure relief valve (PRV) discharge. If your home's incoming water pressure is too high or a thermal expansion problem exists, the PRV does its job and releases water. That is a symptom, not a defect — but it needs diagnosis.
Internal heat exchanger crack. The most serious cause. Scale buildup from hard water or freeze damage can crack the heat exchanger, and that water often drips from the bottom of the cabinet. This usually means a major repair or replacement.
Freeze damage. Even in the Lower Mainland, an unheated garage or exterior wall during a cold snap can freeze and split internal lines or the exchanger.
What You Can Safely Check Yourself
Start by shutting off the unit at the breaker or power switch and closing the cold-water isolation valve if the leak is significant. This stops both the heating and the water supply while you investigate.
With a flashlight and a dry paper towel, dab each connection in turn — cold inlet, hot outlet, both isolation valves, and the gas line union (gas leaks do not drip, but checking confirms you are in the right area). A darkening towel pinpoints the source. Check that the condensate drain tube is clear and sloping downward, and that any condensate neutralizer cartridge is not overflowing.
What you should not do: open the sealed cabinet, attempt to solder or re-thread connections without shutting off gas and water, or keep running a unit that is actively dripping onto electrical components. Tankless units combine gas, electricity, and water in a compact space, which is why diagnosis beyond the external fittings belongs with a licensed gas fitter.
When to Call a Professional
Call right away if water is dripping from the bottom seam of the cabinet (a heat exchanger sign), if you smell gas, if the leak is steady rather than a slow weep, or if water is reaching anything electrical. These are not wait-and-see situations.
Tankless water heaters are serviced by our parent company, CanroHeat, which carries the brand-specific parts and the Red Seal gas-fitting credentials these units require. A proper diagnosis includes pressure-testing the connections, inspecting the heat exchanger, checking incoming water pressure, and confirming the condensate system is healthy. Call CanroHeat at 604-359-1081 for tankless leak diagnosis and repair across Greater Vancouver — we will find the true source rather than just tightening a fitting and hoping.