On December 18, 2015, the Government of Ontario announced
important impending changes to Ontario's storage and repair
laws, designed largely to improve vehicle storage and repair
practices and to lower associated costs. Key changes to the Ontario
Repair and Storage Liens Act will take effect on July 1, 2016, and
will benefit vehicle owners, the asset-based finance industry and
Reducing the Notice Period to Owners and Lienholders
Under the current Act and regulations, persons storing vehicles
are permitted to accumulate storage charges for up to 60 days
before being required to give notice to the owner or other
interested parties of the costs and any attendant possessory lien.
This two-month notice period can lead to significant and
unpredictable costs to owners and lienholders.
The amendments to the Repair and Storage Liens Act and
regulations reduce the notice period for vehicles registered in
Ontario from 60 to 15 days, where the storer knows or has reason to
believe the vehicle was received without the owner's authority.
The notice period will remain 60 days for out-of-province
These amendments ensure that owners and other interested
persons, such as lienholders, have a right to be informed of
storage and repair costs and related liens more quickly, reducing
Calculating "Fair Value" for Storage and Repair
Under the current Act and regulations, where the owner and
repairer/storer have not agreed on pricing for the storage and/or
repair of an article, which includes a vehicle, the repairer/storer
may charge "fair value" for the storage and/or repair.
"Fair value" is undefined under the current Act.
The new regulations introduce much-needed guidance in
determining "fair value" pricing for the repair and
storage of articles, generally. Specifically, Ontario Regulation
427/15 provides that, as of July 1, 2016, the following factors
"shall be included" in determining the fair value of the
storage or storage and repair:
the expenses incurred by the storer in relation to the storage
or storage and repair or storage and part of the repair of the
article, including expenses related to insurance, transportation,
labour, weighing and packing, and
all lawful claims for money advanced and interest on money
advanced by the storer in relation to the article.
In addition, the
following factors "shall be considered and may be
the storer's fixed costs, variable costs, direct costs and
the storer's profit, and
any other relevant factors.
These changes will help prevent over-charging and enhance cost
predictability – a benefit to vehicle owners and the
asset-based finance industry.
These important regulatory changes will help develop a more
accountable and predictable storage and repair regime, reducing
overall claims costs and enhancing consumer protection.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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