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Homeowner Protection Act, 2024 (HPA) came into force in Ontario on June 6, 2024. This legislation aims to enhance the protection of homeowners and buyers. In particular the HPA is expected to be beneficial for vulnerable segments of the population such as seniors, who now have some legislative protection against predatory schemes, and for homebuyers of new construction freehold homes.

The HPA bans the registration of Notices of Security Interest (NOSIs) on title to realty and it deems NOSIs for consumer goods currently registered on title to be deemed to have expired, which permits their deletion from title. NOSIs were used by businesses to register on title their financial interest in equipment such as water heaters and furnaces as security. However, NOSIs were often misused to exploit vulnerable homeowners, by securing high-interest mortgages against their property which led to many homeowners losing their homes.

The HPA also introduced of a statutory 10-day cooling-off period for the purchase of new freehold homes. Prior to the HPA the only statutory 10-day cooling-off period that protected buyers was with respect to the purchase of new construction condominium units pursuant to the Condominium Act. This new HPA statutory 10-day cooling-off period permits buyers to withdraw from new construction agreements with builders without penalties, and ensures that buyers will have an opportunity to seek legal advice and secure financing. Although the Act came into force on June 6, 2024, certain provisions will only come into effect upon proclamation at a later date – including the new freehold home cooling-off period. Therefore, the cooling-off period for new freehold homes is yet to take effect.

The lawyers at Kormans LLP are continually monitoring the implementation of the HPA and its regulations and are available to assist you with any questions that you may have on this blog, or any other legal inquiries that you may have. Please email us at info@kormans.ca or call (905) 270-6660.

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David H. Korman is the Managing Partner at Kormans LLP. His practice areas include residential and commercial real estate transactions, commercial leasing and private and institutional lending. You can reach David at dkorman@kormans.ca.

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