Ontario Strengthening Protections for Homeowners and Homebuyers

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

 The Ontario government is introducing legislation today 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.