Ontario Construction News staff writer
The Ontario government passed legislation in early June that includes a new 10-day cooling-off period for purchases of new freehold homes.
In a move officials say will bolster consumer protection, the Ontario government has introduced the Homeowner Protection Act, 2024, which aims to safeguard homeowners and buyers of new freehold homes.
If passed, the legislation will prohibit the registration of Notices of Security Interest (NOSIs) for consumer goods on land titles and will declare existing NOSIs on titles expired. Additionally, the Act will establish a 10-day cooling-off period for new freehold home purchases, allowing buyers to cancel agreements without penalties.
“This is a landmark piece of legislation – the first of its kind in Canada – to protect consumers from fraud and bad actors,” said Todd McCarthy, Minister of Public and Business Service Delivery. “By banning the registration of consumer Notices of Security Interest on land titles, we’re putting an end to the exploitation that has targeted our elderly and most vulnerable residents.”
NOSIs are used by businesses to protect their interests in rented, financed, or leased goods such as water heaters or furnaces installed on a property. However, investigations have revealed that some unscrupulous actors have leveraged these registrations to demand exorbitant payments from consumers, particularly targeting seniors. These fraudulent activities sometimes involve using multiple NOSIs to secure high-interest mortgages, potentially resulting in homeowners losing their properties.
While the proposed changes will prevent new NOSI registrations, they will not eliminate a business’s security interest in the goods or invalidate their contracts with consumers. Businesses will still be able to repossess fixtures and seek repayment through other legal means if consumers default on payments.
The new legislation also includes measures to enhance transparency and consumer protection for new homebuyers. A mandatory 10-day cooling-off period for new freehold home purchases will allow buyers time to fully understand their commitments and cancel if needed.
The government plans additional consultations to further strengthen protections for condominium communities and freehold homebuyers. These proposals include public disclosure of builder cancellations of purchase agreements, cracking down on illegal home building and selling, and expanding the Condominium Authority Tribunal’s jurisdiction to offer more efficient resolution options for condo disputes.
“This legislation takes historic action in protecting the financial well-being of Ontario’s seniors,” said Laura Tamblyn Watts, President & CEO of CanAge. “Through the banning of Notices of Security Interest, vulnerable Ontarians including seniors are assured to see the government taking proactive measures to prevent predatory behaviours from bad actors.”
Moreover, the Ministry of Citizenship and Multiculturalism is proposing amendments to the Ontario Heritage Act to extend the timeline for municipalities to review listed heritage properties, helping balance conservation efforts with housing construction and future growth.
Chief Mark Crowell of the Waterloo Regional Police Service praised the initiative: “On behalf of the Waterloo Regional Police Service, I would like to extend our appreciation to Minister McCarthy and the Ontario government for working to eliminate the registration of consumer Notices of Security Interest (NOSIs) in the province. We are hopeful the proactive policy approach announced today will put an end to this devastating fraud.”
With these comprehensive measures, the Ontario government aims to create a safer and more transparent housing market, ensuring the protection of all consumers, particularly the most vulnerable.