The new Homeowner Protection Act (Bill 200) (the "HPA") received Royal Assent on June 6, 2024, and will amend s.53 of the New Home Construction Licensing Act, 2017, upon proclamation.
The HPA aims to protect homeowners and buyers of new freehold homes.
Upon proclamation, there will be a mandatory 10-day cooling off period wherein buyers of new-build freehold homes will be able to rescind a purchase agreement as long as they provide written notice of recission to the seller 10 days following the latest of:
- the date the buyer receives all of the prescribed information relating to the purchase;
- the date that the prescribed requirements in respect of the information relating to the purchase is satisfied; and
- the date that the purchaser receives a copy of the purchase agreement.
The legislature has yet to identify what is meant by the term "prescribed".
If a vendor receives a notice of rescission from a purchaser, it will have to promptly refund all the money it received from the purchaser, together with interest calculated on the money "at the prescribed rate" from the date the vendor received the funds to the date of the refund.
The cooling off period is based on calendar days, not business days.
New-build freehold home buyers will have the same protections as purchasers of new build condominiums, where purchasers already benefit from a cooling-off period.1
This legislative change will provide buyers with more time to understand obligations, conduct due diligence, and secure financing.
Footnote
1. https://news.ontario.ca/en/backgrounder/1004635/ontario-strengthening-protections-for-homeowners-and-homebuyers ; Condominium Act, 1998, S.O. 1998, c.19, s. 73(2)
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.
