Decades after creating a 10-day cooling-off period for purchasers to reconsider a new-build condominium contract, the Ontario government has extended the same right to purchasers of detached and freehold newly constructed new homes.
The measure is among a large number of consumer protections that have been advocated for by opposition politicians and citizen groups. They are included in legislation called the Homeowner Protection Act, 2024 and introduced by Todd McCarthy, Minister of Public and Business Service Delivery. The 10-day cooling-off period for condominiums in Ontario was first introduced in 1998.
There have seen so many freehold purchasers disappointed by this lack of a mandatory cooling-off period. Some are feeling harassed in high-pressure sales centre situations, some with limited English skills, and often a tendency to not trust high-profile builders and our consumer protection laws.
Mr. McCarthy is also proposing to have the Home Construction Regulatory Authority (HCRA) keep track of instances where freehold builders cancel purchase agreements in its builder’s registry, another piece of consumer protection that condo buyers already had.
Missing from the measures targeting freehold construction was another long-time ask of consumer advocates: rules for safeguarding deposits for new home purchases that would match the condo-builder requirements that deposits be held in legal trust accounts.
In January, Tarion Inc., the province’s new home warranty insurance provider, reported it could lose $90 million on claims related to cancelled projects by freehold builders. Among the high-profile cancellations of freehold new-builds in 2023 was the collapse of Stateview Homes, which lost $77 million in purchaser deposits for unfinished homes when it collapsed into receivership and bankruptcy.
The government also announced a plan to ban so-called NOSIs or Notices of Security Interest for consumer goods, a tool that has been increasingly abused in recent decades. A NOSI allows sellers or leasers of such residential mechanical equipment as furnaces, water heaters and air conditioning units to register claims against property titles, often without the homeowner’s full understanding or agreement.
“This is a landmark piece of legislation – the first of its kind in Canada – to protect consumers from fraud and bad actors,” said Mr. McCarthy. “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.”
Just imagine finding out that a home you worked your whole life for has a lien that can financially devastate you. This is a shady business practice that should never have been allowed.
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- Canada-U.S. Home Price Comparisons: Lack of Choice Drives Disparity | “Canada and the United States will be compared in “Who has it better?” debates until the end of time. Surface similarities make it easy to initiate these comparisons, but nuance can prevent the drawing of any clear conclusions. The best you can hope for is to learn something useful. That’s what happened when NerdWallet compared housing prices in three major Canadian real estate markets (Toronto, Vancouver and Calgary) to cities in the U.S. (Chicago, Denver and Dallas) with similar populations, economic drivers and cultural/geographic amenities.”
- Bank of Canada Warns Interest Rates Won’t Return To Pre-Pandemic Levels | “Global inflation is easing, and lower rates are on the horizon, but those who didn’t take advantage missed out. That was the message from the Bank of Canada (BoC) Governor, speaking at the International Economic Forum of the Americas yesterday. Governor Tiff Macklem told the conference that central banks have made significant progress on inflation, and monetary policy no longer needs to be as restrictive. However, the risk of rapid inflation remains and that means a return to pre-pandemic rates is unlikely.”
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- Toronto’s Stackt Market to launch new pop-up concept Stacktx across Canada | “Folks from Toronto will most likely be familiar with Stackt Market, a retail space made up of shipping containers that have been turned into storefronts. Now, the market plans to expand with several pop-ups opening across Canada under a new concept called Stacktx.”
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