MARKET INSIGHT FOR THE WEEK ENDING June 14th, 2024

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.
• Many freehold purchasers felt disappointed by this lack of a mandatory cooling-off period.
• Some felt harassed in high-pressure sales centre situations; some with limited English skills.
• There can be 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 (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.

This new legislation not only restores trust in the home-buying process but also ensures that all Ontarians can achieve their dreams of homeownership without fear of hidden financial traps.

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ABOUT BOSLEY REAL ESTATE LTD., BROKERAGE

Bosley Real Estate Ltd. is a full-service, 4th generation brokerage operating since 1928 with offices serving Toronto, Niagara, Waterloo Region, Southern Georgian Bay, St.Catharines,? and Northumberland. With over 250 agents in residential and commercial real estate, the firm has built a reputation on trust, respect, and integrity selling and leasing property throughout Ontario. Bosley Real Estate is also recognized internationally through an exclusive affiliation with Leading Real Estate Companies of the World?. This prestigious partnership connects the brokerage to a global network of 130,000 real estate professionals in 70 countries. Headquartered in Midtown Toronto, President, and Broker of Record, Christan Bosley continues to innovate and maintains the high standard of excellence forged over a century.