Ontario Homeowners’ Protection Act 2024: Strengthening Consumer Protections and Preserving Heritage

The Ontario government is taking significant steps to bolster consumer protections for homeowners and homebuyers through a series of legislative measures aimed at curbing harmful business practices. In addition to ensuring that homebuyers can make well-informed decisions, the province is also focusing on preserving its heritage while supporting housing and infrastructure development. This comprehensive approach aims to create a fairer, more transparent real estate market while honoring the historical significance of Ontario’s communities.

Banning Consumer Notices of Security Interest Registrations

A pivotal aspect of the new measures is the proposed ban on consumer Notices of Security Interest (NOSI) registrations. NOSIs are notices that businesses can register on the Land Registry when they rent, finance, or lease equipment installed on a property, such as water heaters, furnaces, or HVAC units. These registrations can complicate property sales and financing for homeowners, as they often discover these liens only when they attempt to sell their home or seek additional financing.

Since the early 2000s, the number of NOSIs registered annually has surged from approximately 2,000 to over 58,000 in 2023. Currently, there are about 350,000 consumer and commercial NOSIs registered on Ontario’s electronic Land Registry. Misuse of these registrations often pressures consumers into negotiating costly buyouts, which can result in significant financial burdens. The ban on NOSIs aims to protect homeowners from such predatory practices and ensure smoother property transactions.

Protecting Buyers of New Homes

• 10-Day Cooling-Off Period

To further safeguard homebuyers, Ontario proposes a statutory 10-day cooling-off period for purchases of new freehold homes. This cooling-off period allows buyers to thoroughly understand their commitments and back out of the purchase if they decide it is not in their best interest. Currently, purchasers of new condos already benefit from such a cooling-off period. The proposed change aims to align protections across different types of property purchases, ensuring that all new homebuyers have the time and tools to make confident, informed decisions.

• Cancellation Disclosures

In an effort to boost homebuyer confidence, the government intends to introduce regulatory changes that would require public disclosure of a builder’s history of cancelling purchase agreements for new freehold homes. This follows public consultations conducted in summer 2023. Presently, buyers can access a builder’s record of cancelling condo purchase agreements on the Home Construction Regulatory Authority’s (HCRA) website. Extending this transparency to freehold homes will help buyers make better-informed decisions and trust in the reliability of their builders.

• Combating Illegal Building and Selling

Ontario is also targeting illegal building and selling practices. Homes constructed by unlicensed builders who bypass necessary regulatory requirements often have more defects and pose higher risks to buyers. These homes are not enrolled with Tarion, the body overseeing Ontario’s new home warranty and protection program, leading to significantly higher claims. On average, Tarion pays out $45,928 per illegally built home compared to $19,563 for legally built homes.

The province plans to hold consultations in early 2025 to develop strategies to combat illegal building practices. These consultations will focus on creating a fairer market for compliant builders and ensuring better quality homes for buyers of new freehold homes.

Enhancing Protections for Condo Owners

• Expanding the Condominium Authority Tribunal’s Jurisdiction

Condominium communities, home to over a million Ontarians, often face unique challenges and disputes. The Condominium Authority Tribunal, which primarily resolves disputes between condo corporations and owners, is set to expand its jurisdiction. Ontario plans to initiate consultations on this expansion, beginning with issues related to owners’ meetings. This phased and thoughtful approach aims to address the evolving needs of condo communities.

• Consultations for Condo Protections

The government will also consult on initiatives to strengthen protections for condo owners and buyers. These consultations will explore improvements to status certificates, disclosure statements, handling material changes during construction, and records access. The goal is to enhance operational and financial transparency for condo owners while minimizing the administrative burden on condo corporations.

Supporting Municipalities and Property Owners in Conserving Heritage

Ontario is committed to preserving its rich heritage while facilitating housing and infrastructure development. Proposed amendments to the Ontario Heritage Act would give municipalities until January 1, 2027, to complete the evaluation of properties on their municipal heritage registers. This extension aims to ease administrative pressures on municipalities, allowing them more time to focus on conserving historically significant properties.

Additionally, the proposed amendments would provide clarity on how legislated timelines and requirements apply to listed properties, offering greater certainty to both municipalities and property owners.

Building More Housing Near Transit

To capitalize on Ontario’s substantial investments in transit infrastructure, the province is proposing measures to make it easier and faster to build mixed-use housing near transit hubs. This initiative aims to maximize the benefits of transit-oriented communities, providing continued certainty for building partners and fostering the development of vibrant, accessible neighborhoods.

The proposed legislation would exempt designated transit-oriented community lands from certain provisions of the Planning Act related to minister’s zoning orders, facilitating quicker and more efficient development processes.

Conclusion

The Ontario government’s comprehensive approach to strengthening consumer protections, supporting heritage conservation, and facilitating housing development represents a significant step forward for homeowners and homebuyers. By banning harmful business practices like NOSI registrations, introducing cooling-off periods, enhancing transparency, and combating illegal building, the province aims to create a fairer and more transparent real estate market.

Moreover, the focus on preserving Ontario’s heritage and promoting transit-oriented development underscores a balanced approach to growth and conservation. These measures, combined with enhanced protections for condo owners and thoughtful expansion of the Condominium Authority Tribunal’s jurisdiction, reflect Ontario’s commitment to supporting its residents and ensuring a thriving, equitable housing market.

For more detailed information and ongoing updates, homeowners and buyers are encouraged to refer to official resources at Ontario.ca or consult with real estate professionals and legal experts. Staying informed is the best way to navigate these changes and make confident, well-informed decisions in Ontario’s dynamic real estate landscape.

IMPORTANT – February 29, 2024

The First-Time Home Buyer Incentive has been discontinued. 

The deadline for new or updated submissions for the First-Time Home Buyer Incentive is midnight ET on March 21, 2024. 

For new and resubmitted First-Time Home Buyer Incentive applications

All new applications and resubmissions for previously cancelled or declined applications must reach the Program Administrator by March 21, 2024 (midnight ET).

• In cases where an application was previously cancelled or declined, it must be resubmitted and received by the Program Administrator before the March 21, 2024 (midnight ET) deadline.
• If an application is submitted on or before the March 21, 2024, deadline (midnight ET) and is declined due to an application error, the mortgage loan insurer is responsible for rectifying the issue and resubmitting the application.
• Applications resubmitted after March 21, 2024 must undergo a manual review. Requests for such reviews must be submitted no later than March 25, 2024 (midnight ET).

The Program Administrator will process applications received before the deadlines promptly. No new approvals will be granted after March 31, 2024.

For approved applications

The Program Administrator will continue to consider post-approval changes, following the guidance outlined in the Operational Policy Manual (PDF) available on the Place to Call Home website (refer to section 6.3).

For inquiries: FTHBIOps@cmhc-schl.gc.ca

About the Program

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers:

• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:

(i) where the home’s value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or

(ii) where the home’s value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.

Canada Mortgage and Housing Corporation (CMHC) ©2024