Ontario Strengthening Protections for Homeowners and Homebuyers

New legislation would ban registration of consumer Notices of Security Interest on land title

The Voice of Canada News:

The Ontario government is introducing legislation that, if passed, would significantly strengthen protections for homeowners and buyers of new freehold homes. The Homeowner Protection Act, 2024, would ban the registration of Notices of Security Interest (NOSIs) for consumer goods on the Land Registry and deem NOSIs for consumer goods currently registered on title to be expired. It would also provide additional protections for new homebuyers by establishing a 10-day cooling-off period for buyers of new freehold homes.

“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. 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.”

Notices of Security Interest 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. While NOSI registrations are intended to help a business protect their interest in those goods, investigations have revealed bad actors use NOSIs to extort exorbitant payments from consumers, particularly 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 proposed changes do not eliminate a business’ security interest in the fixture or invalidate their contract with the consumer. If the consumer defaults on payment, the business may still be able to repossess the fixture and seek repayment through other means, such as through the courts.

The proposed legislation would further strengthen consumer protections for homeowners and buyers by establishing a 10-day cooling-off period for purchases of new freehold homes, allowing buyers to cancel agreements without penalties. This provides buyers with time to fully understand their commitments and back out if they choose.

The province also intends to further strengthen consumer protections for condominium communities and people buying new 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.

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.

Quick Facts

• In fall 2023, the Ministry of Public and Business Service Delivery held extensive consultations on specific approaches to address the misuse of NOSIs. The ministry received feedback from businesses, legal organizations, law enforcement, other regulators, and consumer advocates, as well as many consumers negatively affected by NOSIs.
• Based on all the information received through the consultation process, it has become apparent that the harms caused by the misuse of consumer NOSIs on the Land Registry far outweigh the benefits provided by their legitimate use.
• Ontario passed the Better for Consumers, Better for Businesses Act, 2023, in December 2023. As part of this legislation, a new Consumer Protection Act, 2023, once in effect, will strengthen protections for Ontarians from unfair business practices while enhancing enforcement.

Quotes

“Our government remains committed to ensuring that the heritage properties most important to Ontario communities are conserved and protected for generations to come. This legislation, if passed, will help advance our shared conservation goals while supporting Ontario’s future growth and our government’s efforts to build at least 1.5 million homes. “– Michael Ford, Minister of Citizenship and Multiculturalism

“On behalf of the Waterloo Regional Police Service (WRPS), 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. I am immensely proud of the role WRPS Detective Adam Stover played in bringing public attention to how organized criminals have been misusing NOSIs to hold the homes of vulnerable seniors hostage. We are hopeful the proactive policy approach announced today will put an end to this devastating fraud.”– Chief Mark Crowell, Waterloo Regional Police Service

“This legislation takes historic action in protecting the financial well-being of Ontario’s seniors. 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. CanAge commends the government for taking decisive action to address this problem and make Ontario a safer marketplace for senior homeowners. “– Laura Tamblyn Watts, President & CEO, CanAge