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Bill 169, Home Warranties to Protect Families Act, 2019

Rakocevic, Tom

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Acts affected

Original

Bill 169 Original (PDF)

EXPLANATORY

NOTE

The

Bill amends the Ontario New Home Warranties Plan Act

to discontinue the Ontario New Home Warranties Plan that is currently operated under

the Act by the Tarion Warranty Corporation, being the only provider of new home

warranties in the Province. The Bill would replace this single-provider system

of new home warranties with a multi-provider system of new home warranties that

would introduce competition in this sector. Under the revised legislation, new

home warranties may be provided only by insurers under the Insurance Act or any other persons holding prescribed

qualifications.

The

Bill provides for an administrator to be appointed to assume control of the

Corporation in order to transition to the multi-provider system. Six months

after the administrator is appointed, an agency is established to wind down the

Plan and to take over responsibility for the Plan until all warranties under

the Plan have expired.

Bill 169 2019

Act to amend the Ontario New Home Warranties Plan Act to provide for

competition in the delivery of new home warranties

Her

Majesty, by and with the advice and consent of the Legislative Assembly of the

Province of Ontario, enacts as follows:

The

short title of the Ontario New Home Warranties Plan Act

is repealed and the following substituted:

New

Home Buyer Protection Act

The Act is amended by adding the following section:

Purpose

0.1 The purposes

of this Act are:

(

a) to

protect new home buyers and owners;

(

b) to

promote the construction in Ontario of properly built new homes; and

(

c) to

enable and administer a multi-provider system for new home warranties that is

responsive to the interests of new home buyers and owners.

(1) Section 1 of the Act is amended by adding the following

definitions:

“administrator”

means the administrator appointed under

section 1.1; (“administrateur général”)

“Agency”

means the ONHW Plan Transition Agency established under

section 16; (“Agence”)

“Director”

means the Director appointed under

section 17.6; (“directeur”)

“new

home” means a home that,

(

a) is

not yet constructed or is under construction, or,

(

b) where

construction is complete, is within 10 years of completion of the construction

and has not been previously occupied; (“logement neuf”)

“new

home warranty policy” means a warranty policy with respect to the construction

of a new home that is provided by a warranty provider and contains the warranties

required under this Act; (“police de garantie des logements neufs”)

“warranty

provider” means an insurer licensed under the Insurance

Act to sell and offer to sell new home warranties under this Act or any

other person who holds the prescribed qualifications to sell and offer to sell

new home warranties. (“fournisseur de garanties”)

(2) The

definitions of “guarantee fund” and “Plan” in

section 1 of the Act are

repealed.

The Act is amended by adding the following sections:

Appointment

of administrator to Corporation

1.1

(1) Promptly

after

section 4 of the Home Warranties to Protect Families

Act, 2019 comes into force, the Minister shall, by order, appoint an

individual as an administrator of the Corporation for the purposes of,

(

a) assuming

control of the Corporation and its activities;

(

b) winding

down the affairs of the Plan and transferring responsibility for outstanding Plan

warranties to the Agency established under

section 16;

(

c) preparing

for the transition to a multi-provider system of new home warranties under this

Act; and

(

d) assuming

and continuing the responsibilities of the Corporation with respect to the

registration of vendors and builders by the Registrar and, subject to

section

16, such other responsibilities of the Corporation under this Act as may be

specified by the regulations.

Term

of appointment

(2) The

appointment of the administrator is valid until the Minister makes an order

terminating the appointment.

Powers

and duties of administrator

(3) The

administrator has the exclusive right to exercise all the powers and perform

all the duties of the directors, officers and members of the Corporation and shall

exercise such additional powers and perform such additional duties as may be

prescribed by the regulations.

Same

(4) In

the order appointing the administrator, the Minister may specify powers and

duties of the administrator and may specify any conditions for, or limitations

on, the exercise or performance of those powers and duties.

Right

of access

(5) The

administrator has the same rights as the board in respect of the documents,

records and information of the Corporation.

Public

servant

(6) The

administrator shall be a public servant employed under

Part III of the Public Service of Ontario Act, 2006 .

Report

to Minister

(7) The

administrator shall report to the Minister as the Minister requires.

Minister’s

directions

(8) The

Minister may issue directions to the administrator about any matter within the

administrator’s jurisdiction, including the making, amending or revoking of any

by-laws of the Corporation, and the administrator shall carry them out.

Review

of decisions

(9) Shortly

after being appointed, the administrator shall review the following decisions

and disputes, with a view to ensuring a fair and timely result for the parties,

(

a) all

decisions made by the Corporation under

section 14 that, at the time of the

review, are under appeal to the Tribunal under

section 16, as those sections

read immediately before they were re-enacted by sections 9 and 11 of the Home

Warranties to Protect Families Act, 2019 ;

(

b) all

disputes that, at the time of the review, are before the Corporation for the

purposes of conciliation under

section 17, as that

section read immediately

before it was re-enacted by

section 11 of the Home Warranties to Protect

Families Act, 2019 ; and

(

c) any

decisions made by the Corporation under

section 14, as that

section read

immediately before it was re-enacted by

section 9 of the Home Warranties to

Protect Families Act, 2019 , that meet the prescribed criteria and any

disputes between an owner and a vendor that meet the prescribed criteria.

personal liability

(10) No

action or other proceeding shall be instituted against the administrator for an

act done in good faith in the execution or intended execution of a duty or

power under this Act, the regulations, a Minister’s order or the appointment

under subsection (1), or for an alleged neglect or default in the execution in

good faith of that duty or power.

Crown

liability

(11) Despite

subsection 8 (3) of the Crown Liability and Proceedings

Act, 2019 , subsection (10) does not relieve the Crown of liability to

which it would otherwise be subject.

Liability

of Corporation

(12) Subsection

(10) does not relieve the Corporation of liability to which it would otherwise

be subject.

Replacement

of board

1.2

(1) On the

appointment of the administrator under

section 1.1, the members of the board

cease to hold office.

Same

(2) Despite

subsection (1), the Minister may provide in an order made under subsection 1.1

(1) that one or more of the members of the board may continue to exercise such

powers or perform such duties as may be specified in the order.

Compensation

(3) The

administrator shall pay to members who cease to hold office under subsection

(1) the compensation, severance or other amounts, if any, that may be required

in accordance with the regulations.

personal liability

(4) No

action or other proceeding shall be instituted against a member or former

member of the board for anything done by the administrator or the Corporation

after the member’s removal under subsection (1).

Crown

liability

(5) Despite

subsection 8 (3) of the Crown Liability and Proceedings

Act, 2019 , subsection (4) does not relieve the Crown of liability to

which it would otherwise be subject.

Liability

of Corporation

(6) Subsection

(4) does not relieve the Corporation of liability to which it would otherwise

be subject.

Regulations

1.3 The Lieutenant Governor

in Council may make regulations relating to anything necessary or advisable for

the appointment of an administrator under

section 1.1, including,

(

a) governing

the powers and duties of the administrator;

(

b) relating

to anything that the Corporation may do by by-law under

section 23;

(

c) respecting

the termination of office of the members of the board;

(

d) respecting

the winding down of the Plan and any related transitional matters;

(

e) respecting

any transitional matters relating to the establishment of a multi-provider

system for new home warranties.

Subsections 2 (2) and (3) of the Act are repealed and the following

substituted:

Objects

(2) The

objects of the Corporation are to uphold the purposes of this Act and to do

anything that is prescribed by the regulations.

Section 5.1 of the Act is amended by adding the following subsection:

Administrator

Application

(0.1) This

section and sections 5.2 and 5.3 only apply after the appointment of the

administrator under

section 1.1 has been terminated by order of the Minister

under subsection 1.1 (2).

The Act is amended by adding the following section:

Information

about registrants

7.1 The Registrar shall maintain

a website on the Internet on which the following information about builders and

vendors who are registered under this Act is published:

1. Any

warranty claims under this Act that have been made with respect to new homes

built or sold by the builder or vendor.

2. Any

past conduct of the builder or vendor relevant to warranties under this Act.

3. Any

prescribed information.

The heading immediately before

section 11 is repealed and the following

substituted:

Protection

for New Home Owners

(Multi-Provider New Home Warranty System)

Sections 11, 12, 13 and 14 of the Act are repealed and the following

substituted:

Mandatory

new home warranty

Vendors

(1) No

vendor shall sell or offer to sell a new home unless the home is covered by a

new home warranty policy provided by a warranty provider.

Disclosures

upon sale

(2) When

a vendor enters into a contract for the sale of a new home to an owner or for

the construction of a new home for an owner, the vendor shall deliver to the

owner a copy of the new home warranty policy and such other documentation as is

prescribed by the regulations.

Builders

(3) No

builder shall commence to construct a new home unless the home is covered by a

new home warranty policy provided by a warranty provider.

Mandatory

warranty for renovations

(1) If

the regulations so provide, no person shall undertake to renovate an existing

home or to sell an existing home that has been renovated unless the renovation

is covered by a renovated home warranty policy provided by a policy provider.

Same

(2) The

warranties, conditions and requirements of a renovated home warranty policy

shall be prescribed by the regulations.

New

home warranty policy

(1) Every

new home warranty policy provided under this Act shall include the following

warranties from the vendor to the owner of the new home:

1. That

the new home,

i. is

constructed in a workmanlike manner,

ii. is

fit for habitation, and

iii. is

constructed in accordance with the Ontario Building Code.

2. That

the new home,

i. is

free from defects in materials and labour and shall remain free of such defects

for a period of at least two years after the date on which the warranty takes

effect,

ii. is

free of defects in the building envelope, including defects resulting in water

penetration and shall remain free of such defects for a period of at least five

years after the date on which the warranty takes effect, and

iii. is

free of major structural defects as defined by the regulations and shall remain

free of such defects for a period of at least 10 years after the date on which

the warranty takes effect.

3. Such

other warranties as are prescribed by the regulations.

Prescribed

exclusions

(2) The

warranties under subsection (1) do not apply in respect of such defects,

damages or other matters that are prescribed by the regulations.

Same,

circumstances and limitations

(3) The

warranties under subsection (1) do not apply in such circumstances as may be

prescribed by the regulations and are subject to such limitations as may be

prescribed by the regulations.

Term

of warranty

(4) A

warranty under subsection (1) applies to claims made against a warranty

provider within,

(

a) in

the case of a warranty made under paragraph 2 of subsection (1), the relevant period

of time set out in the paragraph; and

(

b) in

all other cases, the period of time prescribed by the regulations.

Application

of warranties

(5) The

warranties under subsection (1) apply where the construction of a new home is

completed in accordance with the contract between the vendor and the owner, despite

any agreement or waiver to the contrary, and the warranties are in addition to

any other rights the owner may have and to any other warranty agreed upon.

Certificate

of completion

(6) Upon

completion of the construction of a new home, the vendor of the home shall

deliver to the owner a certificate certifying the date upon which the

construction was completed and the date upon which the new home warranties

under subsection (1) take effect.

Privity

of contract

(7) A

warranty under subsection (1) is enforceable even though there is no privity of

contract between the owner and the vendor.

New

owner

(8) The

warranties under this

section are for the benefit of whoever is the owner of

the new home from time to time until the end of the warranty period.

Same

(9) If

the ownership of the new home changes during the warranty period, the previous

owner shall transfer to the new owner the prescribed documentation and take the

prescribed measures relating to the new home warranties in accordance with the

regulations.

Warranties

where construction incomplete

(1) Subject

to the regulations, every new home warranty policy under this Act shall provide

coverage for the circumstances described in subsections (2) and (3) in addition

to the warranties provided under

section 13.

Same,

where no possession

(2) Subject

to the regulations, a warranty provider under a new home warranty policy shall make

warranty payments to a person who has entered into a contract to purchase a new

home from a vendor if the person does not take possession of the new home in

accordance with the terms of the contract as a result of,

(

a) the

person exercising a statutory right to rescind the contract before closing; or

(

b) the

title to the home not being transferred to the person due to the fact that the

vendor has gone bankrupt or has fundamentally breached the contract.

Same,

failure to substantially perform

(3) Subject

to the regulations, a warranty provider under a new home warranty policy shall

make warranty payments to the owner of land who entered into a contract with a

builder for the construction of a home on the land where the builder has failed

to substantially perform the contract.

Interpretation,

substantial performance

(4) For

the purposes of subsection (3), a contract is substantially performed if it is

substantially performed within the meaning of subsection 2 (1) of the Construction Act .

Amount

of payment

(5) The

amount of a warranty payment under subsection (2) or (3) shall be determined in

accordance with the regulations.

Section 15.1 of the Act is amended by striking out “for which the builder has

complied with

section 12 and has substantially completed the construction” and

substituting “for which the builder has substantially completed the

construction”.

Sections 16 and 17 of the Act are repealed and the following substituted:

Transition

from Ontario New Home Warranties Plan

(1) In

this section,

“guarantee

fund” means the provision that was made by the Corporation for compensation under

the Plan under this Act, as it read immediately before the day

section 9 of the

Home Warranties to Protect Families Act, 2019 came

into force; (“fonds de garantie”)

“Plan”

means the Ontario New Home Warranties Plan continued under

section 11 of this

Act, as that

section read immediately before it was re-enacted by

section 9 of

the Home Warranties to Protect

Families Act, 2019 . (“Régime”)

Agency

(2) No

later than six months after the day the administrator is appointed under

section 1.1, the Lieutenant Governor in Council shall, by regulation, establish

Transition Agency and in French as Agence de transition du Régime GLNO.

Constitution

(3) The

constitution of the Agency and its board of directors shall be in accordance

with the regulations.

Objects

(4) The

objects of the Agency are,

(

a) to

assume the responsibilities of the Corporation for the maintenance, management and

administration of the guarantee fund;

(

b) to

assume the responsibilities of the Corporation for the payment out of the guarantee

fund of claims by owners in respect of warranties that were given under the

Plan before the day

section 9 of the Home Warranties to

Protect Families Act, 2019 came into force;

(

c) to

exercise such powers and perform such duties as may be assigned to it by the regulations;

and

(

d) to

carry out the responsibilities, powers and duties referred to in clauses (a),

(

b) and (

c) until such time as all warranties given under the Plan have expired

or are otherwise no longer valid.

Natural

person powers

(5) The Agency shall have the capacity, rights, powers and

privileges of a natural person for the purpose of carrying out its objects,

except as limited by the regulations.

Powers and duties

(6) The Agency shall, subject to the regulations,

(

a) make payment out of the guarantee fund in accordance

with

section 14 of this Act, as that

section read immediately before it was

re-enacted by

section 9 of the Home Warranties to

Protect Families Act, 2019 ; and

(

b) exercise the powers and perform the duties of the

Corporation described in sections 16 and 17 of this Act, as those sections read

immediately before they were re-enacted by

section 11 of the Home

Warranties to Protect Families Act, 2019 , with respect to

decisions it makes to pay out amounts from the guarantee fund and conciliating

disputes between and owner and a vendor.

Use

of revenues

(7) The

Agency shall apply its revenues to carry out its objects and duties and for no

other purpose.

Crown

agency

(8) Subject

to the regulations, the Agency is, for all its purposes, an agent of Her

Majesty and its powers may be exercised only as an agent of Her Majesty.

Employees

(9) The

Agency may employ or otherwise engage persons for the proper conduct of its

activities, subject to the regulations or, if the regulations so provide,

employees may be appointed under

Part III of the Public

Service of Ontario Act, 2006 .

Corporations Act and Corporations Information Act

(10) The

Corporations Act and the Corporations

Information Act do not apply to the Agency, except as provided by the

regulations.

Application

(11) Sections

16 and 17 of this Act, as they read immediately before they were re-enacted by

section

11 of the Home Warranties to Protect Families Act, 2019 ,

shall continue to apply to any payments out of the guarantee fund that the

Agency decides to make under clause (6) (a), an appeal from that decision or

any conciliation or arbitration of a dispute between an owner and a vendor and

for that purpose, any reference to the Corporation in those sections shall be

deemed to be a reference to the Agency.

Agency

as warranty provider

(12) Nothing

in this

section shall prevent the Agency from obtaining the qualifications of a

warranty provider and acting as a warranty provider under this Act.

Regulations

(13) The

Lieutenant Governor in Council may make regulations,

(

a) governing

the establishment, governance and operations of the Agency;

(

b) governing

the constitution of the Agency and its board of directors;

(

c) governing

the objects, powers and duties of the Agency;

(

d) respecting

the limitations on the capacity, rights, powers

and privileges of a natural person of the Agency for the purpose of carrying

out its objects;

(

e) respecting the status of the Agency as a crown agent

and any limitations relating thereto;

(

f) respecting anything in this

section that is subject to the

regulations or that is required or permitted to be provided by the regulations,

to be done in accordance with the regulations, to be limited by the regulations

or to be prescribed by the regulations;

(

g) governing

the transition of responsibility for warranties under the Plan from the

Corporation to the Agency and any matters related to that transition as may be

necessary for the efficient administration of the warranties.

Clause 17.2 (1) (

c) of the Act is amended by striking out “have been enrolled

in the Plan” at the end and substituting “are covered by a new home warranty

policy under this Act”.

(1) Clause 17.3 (1) (

a) of the Act is amended by striking out “are

enrolled in the Plan” and substituting “are covered by a new home warranty

policy under this Act”.

(2) Paragraph

2 of subsection 17.3 (2) of the Act is amended by striking out “qualifies for

enrolment in the Plan” at the end and substituting “qualifies for coverage from

a new home warranty policy under this Act”.

Clause 17.4 (2) (

a) of the Act is amended by striking out “have been enrolled

in the Plan” at the end and substituting “are covered by a new home warranty

policy under this Act”.

The heading immediately before

section 18 of the Act is repealed and the

following substituted:

Administration

and Enforcement

The Act is amended by adding the following section:

Director

17.6

(1) The

Minister may appoint a Director to exercise the powers and perform the duties

of the Director under this Act.

Public

servant

(2) The

Director shall be a public servant employed under

Part III of the Public Service of Ontario Act, 2006 .

Subsection 18 (1) of the Act is amended by striking out “The Corporation” at

the beginning and substituting “The Director”.

Subsection 19 (1) of the Act is amended by striking out “Corporation” wherever

it appears and substituting in each case “Director”.

The Act is amended by adding the following section:

Same

22.2 The Lieutenant Governor

in Council may make regulations with respect to anything necessary or advisable

for the efficient administration and enforcement of this Act including,

(

a) governing

renovated home warranty policies for the purposes of

section 12;

(

b) governing

the mediation or arbitration of disputes in relation to the building or selling

of new homes.

Repeal

of New Home Construction Licensing Act, 2017

The New Home Construction Licensing Act 2017 is

repealed.

Repeal

of Protection of Owners and Purchasers of New Homes Act,

The Protection of Owners and Purchasers of New Homes Act,

2017 is repealed.

Commencement

(1) Subject to subsection (2), this Act comes into force on the day

it receives Royal Assent.

(2) Subsection

3 (2) and sections 8, 9, 10, 11, 12, 13 and 14 come into force on a day to be

named by proclamation of the Lieutenant Governor.

Short

title

The

short title of this Act is the Home Warranties to

Protect Families Act, 2019 .

Date Bill stage Event Outcome Committee

December 12, 2019

First Reading

Vote

Carried

Debates and Progress

First Reading

December 12, 2019

Committee

Second Reading

Committee

Third Reading

Royal Assent

Acts affected - Bill 169

Most Ontario public acts are available electronically; to view copies of the Acts to be amended by this bill visit e-laws

New Home Construction Licensing Act, 2017

Ontario New Home Warranties Plan Act

Protection for Owners and Purchasers of New Homes Act, 2017

Legislative Assembly of Ontario

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