Newly introduced legislation from the province is aimed at protecting homeowners and buyers of new freehold homes.
The government of Ontario announced on Monday, May 27, 2024, that it was introducing a new piece of legislation that, if passed, would work to ban the registration of Notices of Security Interest (NOSIs) for consumer goods on the Land Registry, as well as to deem NOSIs for consumer goods currently registered on title to be expired. The legislation will also provide additional protections for new homebuyers by establishing a 10 day cooling-off period for buyers of new freehold homes.
According to the government release, NOSIs are registrations that “may be made on the land registry system by a business when it rents, finances or leases goods such as a water heater or furnace installed on a property.” The government notes that NOSIs are intended to help businesses protect their interest in the goods installed in a home, but investigations have found that bad actors can use NOSIs to attempt to extort “exorbitant” payments from consumers, with a particular risk to seniors.
“These scams can sometimes involve leveraging the NOSI, or multiple NOSIs, to secure high-interest mortgages on the property, which can ultimately lead to the homeowner losing their property,” the release states.
The government notes the legislation would not eliminate a business’ security interest in the fixture, nor would it invalidate the contract they have with the consumer. If a consumer defaults on a payment for the piece of equipment, the business may still be able to repossess the fixture and seek repayment through other means.
The 10 day cooling-off period would apply to purchases of new freehold homes, which would then allow buyers to cancel agreements without penalties, allowing them time to fully understand their commitments and back out “if they choose.”
Todd McCarthy, the Minister of Public and Business Service Delivery, said the proposed changes will protect Ontarians, particularly new homeowners and seniors, from those seeking to exploit them.
“This is a landmark piece of legislation – the first of its kind in Canada – to protect consumers from fraud and bad actors,” McCarthy said.
“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. Moreover, we’re giving Ontarians the crucial information and time they need to confidently make one of the biggest financial decisions of their lives through our enhanced protections for new homebuyers.”
Included in the legislation, which has been titled the Homeowner Protection Act, 2024, the government said it intends to further strengthen consumer protections for condominium communities and people buying freehold homes by:
- Ensuring public disclosure of builder cancellations of purchase agreements for new freehold homes to promote transparency, protecting consumers from unreliable builders
- Consulting on proposals to crack down on illegal home building and selling
- Expanding the Condominium Authority Tribunal’s jurisdiction to cover a broader range of disputes, giving condo owners more accessible and efficient resolution options and improving condo management. Additionally, the province will consult with stakeholders to strengthen protections for condo owners and purchasers to improve how condos are run
“The province intends to consult in the coming months on changes to support the implementation of the cooling-off period for purchases of new freehold homes, improve access to information and transparency for buyers of new freehold homes, and better support condo communities,” the government release stated.
“As part of the legislation, the Ministry of Citizenship and Multiculturalism is proposing amendments to the Ontario Heritage Act, to help ease administrative pressures related to the conservation of legacy listed heritage properties. This would help ensure municipalities are prioritizing the review of properties most important to their communities, by extending the timeline for them to review listed properties by an additional two years to January 1, 2027. These proposed changes will help with the conservation of heritage properties while supporting housing construction and future growth.”
