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Ontario New Home Warranties Plan Act

R.S.O. 1990, CHAPTER O.31

Historical version for the period July 25, 2007 to December 14, 2009.

Last amendment: 2006, c. 21, Sched. F, s. 136 (1).

Definitions

1. In this Act,

“builder” means a person who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home whether for the purpose of sale by the person or under a contract with a vendor or owner; (“constructeur”)

“Corporation” means the corporation designated under section 2; (“Société”)

“guarantee fund” means the provision made by the Corporation for compensation under the Plan; (“fonds de garantie”)

“home” means,

(a) a self-contained one-family dwelling, detached or attached to one or more others by common wall,

(b) a building composed of more than one and not more than two self-contained, one-family dwellings under one ownership,

(c) a condominium dwelling unit, including the common elements, or

(d) any other dwelling of a class prescribed by the regulations as a home to which this Act applies,

and includes any structure or appurtenance used in conjunction therewith, but does not include a dwelling built and sold for occupancy for temporary periods or for seasonal purposes; (“logement”)

“inspector” means an inspector appointed by the Corporation under section 18; (“inspecteur”)

“Minister” means the Minister of Consumer and Business Services; (“ministre”)

“owner” means a person who first acquires a home from its vendor for occupancy, and the person’s successors in title; (“propriétaire”)

“Plan” means the Ontario New Home Warranties Plan referred to in section 11; (“Régime”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“Registrar” means the Registrar appointed by the Corporation under section 3; (“registrateur”)

“regulations” means the by-laws of the Corporation made under section 23; (“règlements”)

“sell” includes entering into an agreement to sell; (“vendre”)

“Tribunal” means the Licence Appeal Tribunal; (“Tribunal”)

“vendor” means a person who sells on his, her or its own behalf a home not previously occupied to an owner and includes a builder who constructs a home under a contract with the owner; (“vendeur”)

“warranty” means a warranty set out in section 13. (“garantie”) R.S.O. 1990, c. O.31, s. 1; 1999, c. 12, Sched. G, s. 30 (1); 2001, c. 9, Sched. D, s. 13.

Designation of Corporation

2. (1) The Lieutenant Governor in Council shall designate a non-profit corporation incorporated without share capital under the Corporations Act to be the Corporation for the purposes of this Act. R.S.O. 1990, c. O.31, s. 2 (1).

Objects

(2) Upon its designation, the objects of the Corporation are extended to include,

(a) the administration of the Ontario New Home Warranties Plan;

(b) the establishment and administration of a guarantee fund providing for the payment of compensation under section 14, whether by the establishment of a fund for the purpose or by contract with licensed insurers;

(c) assisting in the conciliation of disputes between vendors and owners; and

(d) engaging in undertakings for the purpose of improving communications between vendors and owners. R.S.O. 1990, c. O.31, s. 2 (2).

Application of Insurance Act

(3) The Insurance Act does not apply to the Corporation and its undertakings in respect of any matter within its objects or authorized by this Act. R.S.O. 1990, c. O.31, s. 2 (3).

Registrar

3. (1) The Corporation shall appoint a Registrar who shall perform the duties and exercise the powers given to the Registrar by this Act and the regulations under the supervision of the Corporation and who shall perform such other duties as are assigned by the Corporation. R.S.O. 1990, c. O.31, s. 3.

Deputy Registrars

(2) The Corporation may appoint one or more Deputy Registrars who have and may exercise the powers and duties of the Registrar that the Registrar specifies. 1998, c. 18, Sched. E, s. 187.

References to Registrar

(3) If the Registrar so specifies, references in this Act and the regulations to the Registrar shall be deemed to refer to a Deputy Registrar. 1998, c. 18, Sched. E, s. 187.

Revenues and expenses

4. All money payable under this Act to the Corporation shall be retained by the Corporation and applied to defray the expenses incurred and expenditures made in the carrying out of its duties under this Act and otherwise for the purposes of its objects set out in subsection 2 (2). R.S.O. 1990, c. O.31, s. 4.

Annual report

5. (1) The Corporation shall make a report annually to the Minister upon the affairs of the Corporation. 2000, c. 26, Sched. B, s. 15 (1).

Tabling

(2) The Minister shall,

(a) submit the report to the Lieutenant Governor in Council;

(b) lay the report before the Assembly if it is in session; and

(c) deposit the report with the Clerk of the Assembly if the Assembly is not in session. 2000, c. 26, Sched. B, s. 15 (1).

Disclosure by Corporation

(3) The Corporation may give a copy of its report under subsection (1) to other persons before the Minister complies with subsection (2). 2000, c. 26, Sched. B, s. 15 (1).

Registration required

6. No person shall act as a vendor or a builder unless the person is registered by the Registrar under this Act. R.S.O. 1990, c. O.31, s. 6.

Registration of vendors and builders

7. (1) An applicant is entitled to registration by the Registrar except where,

(a) having regard to the applicant’s financial position, the applicant cannot reasonably be expected to be financially responsible in the conduct of the applicant’s undertakings;

(b) the past conduct of the applicant affords reasonable grounds for belief that the applicant will not carry on the applicant’s undertakings in accordance with law and with integrity and honesty;

(c) the applicant is a corporation and,

(i) having regard to its financial position, it cannot reasonably be expected to be financially responsible in the conduct of its undertakings, or

(ii) the past conduct of its officers or directors affords reasonable grounds for belief that its undertakings will not be carried on in accordance with law and with integrity and honesty; or

(d) in the case of an application for registration as a builder, the applicant does not have sufficient technical competence to consistently perform the warranties. R.S.O. 1990, c. O.31, s. 7 (1).

Conditions of registration

(2) A registration is subject to such terms and conditions to give effect to the purposes of this Act as are consented to by the applicant or imposed by the Tribunal or prescribed by the regulations. R.S.O. 1990, c. O.31, s. 7 (2).

Registration not transferable

(3) A registration is not transferable. R.S.O. 1990, c. O.31, s. 7 (3).

Refusal to register

8. (1) Subject to section 9, the Registrar may refuse to register an applicant where in the Registrar’s opinion the applicant is disentitled to registration under section 7. R.S.O. 1990, c. O.31, s. 8 (1).

Revocation and refusal to renew

(2) Subject to section 9, the Registrar may refuse to renew or may suspend or revoke a registration for any reason that would disentitle the registrant to registration under section 7, if the registrant were an applicant, or where the registrant has a record of breaches of warranties or of failure or unwillingness to complete performance of contracts or is in breach of a term or condition of the registration. R.S.O. 1990, c. O.31, s. 8 (2).

Notice of proposal to refuse or revoke

9. (1) Where the Registrar proposes to refuse to grant or renew a registration or proposes to suspend or revoke a registration, the Registrar shall serve notice of the proposal, together with written reasons therefor, on the applicant or registrant. R.S.O. 1990, c. O.31, s. 9 (1).

Notice requiring hearing

(2) A notice under subsection (1) shall state that the applicant or registrant is entitled to a hearing by the Tribunal if the applicant or registrant mails or delivers, within fifteen days after service of the notice under subsection (1), notice in writing requiring a hearing to the Registrar and the Tribunal. R.S.O. 1990, c. O.31, s. 9 (2).

Powers of Registrar where no hearing

(3) Where an applicant or registrant does not require a hearing by the Tribunal in accordance with subsection (2), the Registrar may carry out the proposal stated in the notice under subsection (1). R.S.O. 1990, c. O.31, s. 9 (3).

Powers of Tribunal

(4) Where an applicant or registrant requires a hearing by the Tribunal in accordance with subsection (2), the Tribunal shall appoint a time for and hold the hearing and, on the application of the Registrar at the hearing, may by order direct the Registrar to carry out the Registrar’s proposal or refrain from carrying it out and to take such action as the Tribunal considers the Registrar ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Registrar. R.S.O. 1990, c. O.31, s. 9 (4).

Conditions of order

(5) The Tribunal may attach such terms and conditions to its order or to the registration as it considers proper to give effect to the purposes of this Act. R.S.O. 1990, c. O.31, s. 9 (5).

Parties

(6) The Registrar, the applicant or registrant who has required the hearing and such other persons as the Tribunal may specify are parties to proceedings before the Tribunal under this section. R.S.O. 1990, c. O.31, s. 9 (6).

Voluntary cancellation

(7) Despite subsection (1), the Registrar may cancel a registration upon the request in writing of the registrant in the prescribed form surrendering the registrant’s registration. R.S.O. 1990, c. O.31, s. 9 (7).

Continuance pending renewal

(8) Where, within the time prescribed therefor or, if no time is prescribed, before expiry of the registration, a registrant has applied for renewal of a registration and paid the prescribed fee, the registration shall be deemed to continue,

(a) until the renewal is granted; or

(b) where the registrant is served with notice that the Registrar proposes to refuse to grant the renewal, until the time for giving notice requiring a hearing has expired and, where a hearing is required, until the Tribunal has made its order. R.S.O. 1990, c. O.31, s. 9 (8).

Appeal

(9) Even if a registrant appeals an order of the Tribunal under section 11 of the Licence Appeal Tribunal Act, 1999, the order takes effect immediately but the Tribunal may grant a stay until the disposition of the appeal. 1999, c. 12, Sched. G, s. 30 (2).

Further applications

10. A further application for registration may be made upon new or other evidence or where it is clear that material circumstances have changed. R.S.O. 1990, c. O.31, s. 10.

Ontario New Home Warranties Plan

11. (1) The Ontario New Home Warranties Plan is continued under the name Ontario New Home Warranties Plan in English and Régime de garanties des logements neufs de l’Ontario in French and is comprised of the warranties and the guarantee fund and compensation provided for by this Act. R.S.O. 1990, c. O.31, s. 11 (1).

Disclosures on entering into contract

(2) When a vendor enters into a contract for the sale of a home to an owner or for the construction of a home for an owner, the vendor shall deliver to the owner such documentation and notices respecting the Plan as are prescribed by the regulations. R.S.O. 1990, c. O.31, s. 11 (2).

Notice of commencing construction

12. A builder shall not commence to construct a home until the builder has notified the Corporation of the fact, has provided the Corporation with such particulars as the Corporation requires and has paid the prescribed fee to the Corporation. R.S.O. 1990, c. O.31, s. 12.

Warranties

13. (1) Every vendor of a home warrants to the owner,

(a) that the home,

(i) is constructed in a workmanlike manner and is free from defects in material,

(ii) is fit for habitation, and

(iii) is constructed in accordance with the Ontario Building Code;

(b) that the home is free of major structural defects as defined by the regulations; and

(c) such other warranties as are prescribed by the regulations. R.S.O. 1990, c. O.31, s. 13 (1).

Exclusions

(2) A warranty under subsection (1) does not apply in respect of,

(a) defects in materials, design and work supplied by the owner;

(b) secondary damage caused by defects, such as property damage and personal injury;

(c) normal wear and tear;

(d) normal shrinkage of materials caused by drying after construction;

(e) damage caused by dampness or condensation due to failure by the owner to maintain adequate ventilation;

(f) damage resulting from improper maintenance;

(g) alterations, deletions or additions made by the owner;

(h) subsidence of the land around the building or along utility lines, other than subsidence beneath the footings of the building;

(i) damage resulting from an act of God;

(j) damage caused by insects and rodents, except where construction is in contravention of the Ontario Building Code;

(k) damage caused by municipal services or other utilities;

(l) surface defects in work and materials specified and accepted in writing by the owner at the date of possession. R.S.O. 1990, c. O.31, s. 13 (2).

Certificate of completion

(3) The vendor of a home shall deliver to the owner a certificate specifying the date upon which the home is completed for the owner’s possession and the warranties take effect from the date specified in the certificate. R.S.O. 1990, c. O.31, s. 13 (3).

Term of warranty under subs.(1)

(4) A warranty under subsection (1) applies only in respect of claims made thereunder within one year after the warranty takes effect, or such longer time under such conditions as are prescribed. R.S.O. 1990, c. O.31, s. 13 (4).

Privity of contract

(5) A warranty is enforceable even though there is no privity of contract between the owner and the vendor. R.S.O. 1990, c. O.31, s. 13 (5).

Application of warranties

(6) The warranties set out in subsection (1) apply despite any agreement or waiver to the contrary and are in addition to any other rights the owner may have and to any other warranty agreed upon. R.S.O. 1990, c. O.31, s. 13 (6).

Compensation

14. (1) Subject to the regulations, a person who has entered into a contract to purchase a home from a vendor is entitled to receive payment out of the guarantee fund for the amount that the person paid to the vendor as a deposit to be credited to the purchase price under the contract on closing if,

(a) the person has exercised a statutory right to rescind the contract before closing; or

(b) the person has a cause of action against the vendor resulting from the fact that title to the home has not been transferred to the person because,

(i) the vendor has gone into bankruptcy, or

(ii) the vendor has fundamentally breached the contract. 1998, c. 19, s. 185 (1); 2000, c. 26, Sched. B, s. 15 (2).

Same, construction contract

(2) Subject to the regulations, an owner of land who has entered into a contract with a builder for the construction of a home on the land and who has a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract, is entitled to receive payment out of the guarantee fund of the amount by which the amount paid by the owner to the builder under the contract exceeds the value of the work and materials supplied to the owner under the contract. 1998, c. 19, s. 185 (1).

Same, breach of warranty

(3) Subject to the regulations, an owner of a home is entitled to receive payment out of the guarantee fund for damages resulting from a breach of warranty if,

(a) the person became the owner of the home through receiving a transfer of title to it or through the substantial performance by a builder of a contract to construct the home on land owned by the person; and

(b) the person has a cause of action against the vendor or the builder, as the case may be, for damages resulting from the breach of warranty. 1998, c. 19, s. 185 (1); 2000, c. 26, Sched. B, s. 15 (3, 4).

Same, major structural defect

(4) Subject to the regulations, an owner who suffers damage because of a major structural defect mentioned in clause 13 (1) (b) is entitled to receive payment out of the guarantee fund for the cost of the remedial work required to correct the major structural defect if the owner makes a claim within four years after the warranty expires or such longer time under such conditions as are prescribed. 1998, c. 19, s. 185 (1).

Interpretation, substantial performance

(5) For the purposes of this section, a contract is substantially performed if it is substantially performed within the meaning given by subsection 2 (1) of the Construction Lien Act. 1998, c. 19, s. 185 (1).

Other recovery

(6) In assessing the amount for which a person is entitled to receive payment out of the guarantee fund under this section, the Corporation shall take into consideration any benefit, compensation, indemnity payable, or the value of work and materials furnished to the person from any source. 1998, c. 19, s. 185 (1).

Performance

(7) The Corporation may perform or arrange for the performance of any work in lieu of or in mitigation of damages claimed under this section. 1998, c. 19, s. 185 (1).

Condominiums

15. For the purposes of sections 13 and 14,

(a) a condominium corporation shall be deemed to be the owner of the common elements of the corporation;

(b) subject to clauses (c) and (d), if dwelling units are included in the property of a condominium corporation, the warranties on the common elements of the corporation take effect on the date of the registration of the declaration and description;

(c) no warranties shall take effect on the common elements of a common elements condominium corporation or a vacant land condominium corporation;

(d) the warranties on common elements of a phased condominium corporation, that are added to the corporation after the registration of the declaration and description take effect on the date of the registration of the amendments to the declaration and description that created them; and

(e) the amalgamation of two or more condominium corporations does not affect or extend the warranties on the common elements of the amalgamating corporations. 1998, c. 19, s. 185 (2).

Liability of vendor

15.1 For the purposes of sections 13 and 14, a person, who at any time has registered as a vendor under this Act with respect to a home, for which the builder has complied with section 12 and has substantially completed the construction, shall be deemed to be a vendor of the home even if another person sells the home to an owner or completes a transaction to sell the home to an owner. 1998, c. 18, Sched. E, s. 188.

Notice of decision under s. 14

16. (1) Where the Corporation makes a decision under section 14, it shall serve notice of the decision, together with written reasons therefor, on the person or owner affected. R.S.O. 1990, c. O.31, s. 16 (1).

Notice requiring hearing

(2) A notice under subsection (1) shall state that the person or owner served is entitled to a hearing by the Tribunal if the person or owner mails or delivers, within fifteen days after service of the notice under subsection (1), notice in writing requiring a hearing to the Corporation and the Tribunal. R.S.O. 1990, c. O.31, s. 16 (2).

Powers of Tribunal

(3) Where a person or owner gives notice in accordance with subsection (2), the Tribunal shall appoint a time for and hold the hearing and may by order direct the Corporation to take such action as the Tribunal considers the Corporation ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Corporation. R.S.O. 1990, c. O.31, s. 16 (3).

Parties

(4) The Corporation, the person or owner who has required the hearing and such other persons as the Tribunal may specify are parties to proceedings before the Tribunal under this section. R.S.O. 1990, c. O.31, s. 16 (4).

Conciliation of disputes

17. (1) The Corporation may, upon the request of an owner, conciliate any dispute between the owner and a vendor. R.S.O. 1990, c. O.31, s. 17 (1).

Idem

(2) Where there is a dispute between a vendor and an owner arising out of the contract, neither party shall commence any proceeding in respect thereof until after fifteen days after the party notifies the Corporation of the dispute for the purpose of giving the Corporation an opportunity to effect conciliation. R.S.O. 1990, c. O.31, s. 17 (2).

Information to Corporation

(3) Each party to a dispute shall supply the Corporation with such particulars thereof as the Corporation requires. R.S.O. 1990, c. O.31, s. 17 (3).

Arbitration

(4) Every agreement between a vendor and prospective owner shall be deemed to contain a written agreement to submit present or future differences to arbitration, subject to appeal to the Divisional Court, and the Arbitrations Act applies. R.S.O. 1990, c. O.31, s. 17 (4).

Inspectors

18. (1) The Corporation shall appoint inspectors for the purposes of this Act. R.S.O. 1990, c. O.31, s. 18 (1).

Power of entry

(2) An inspector may, for the purpose of inspecting a home during its construction, enter in or upon and inspect the premises constituting the site of the construction at any time without a warrant. R.S.O. 1990, c. O.31, s. 18 (2).

Powers of inspector

(3) For the purposes of an inspection, the inspector may,

(a) require the production of the drawings and specifications of a home or any part thereof, including any drawings prescribed by the regulations, for his or her inspection and may require information from any person concerning any matter related to a home or part thereof;

(b) be accompanied by any person who has special or expert knowledge of any matter in relation to a home or part thereof; and

(c) alone or in conjunction with such other person or persons possessing special or expert knowledge, make such examinations, tests, or inquiries as are necessary for the purposes of the inspection. R.S.O. 1990, c. O.31, s. 18 (3).

Obstruction of inspectors

(4) No person shall hinder, obstruct, molest or interfere with or attempt to hinder, obstruct, molest or interfere with an inspector in the exercise of a power or performance of a duty under this Act. R.S.O. 1990, c. O.31, s. 18 (4).

Restraining order

19. (1) Where it appears to the Corporation that any vendor or builder does not comply with this Act or the regulations, despite the imposition of any penalty in respect of such non-compliance and in addition to any other rights it may have, the Corporation may apply to the Superior Court of Justice for an order directing such person to comply with such provision and, upon the application, the court may make the order or such other order as the court thinks fit. R.S.O. 1990, c. O.31, s. 19 (1); 2000, c. 26, Sched. B, s. 15 (5).

Appeal

(2) An appeal lies to the Divisional Court from an order made under subsection (1). R.S.O. 1990, c. O.31, s. 19 (2).

Service of notice

20. Any notice or document required by this Act to be served or given may be served or given personally or by registered mail addressed to the person to whom notice is to be given at the person’s last known address and, where notice is served or given by mail, the service shall be deemed to have been made on the fifth day after the day of mailing unless the person to whom the notice is given establishes that the person, acting in good faith, through absence, accident, illness or other cause beyond the person’s control, did not receive the notice, or did not receive the notice until a later date. R.S.O. 1990, c. O.31, s. 20.

Certificate of evidence

21. The following statements are admissible in evidence as proof, in the absence of evidence to the contrary, of the facts stated in them for all purposes in any proceeding or prosecution, without the need for proving the office or signature of the Registrar, if the statements purport to be certified by the Registrar:

1. A statement as to the registration or non-registration of any person.

2. A statement as to the filing or non-filing of any document or material required or permitted to be filed with the Corporation.

3. A statement as to any other matter pertaining to a registration, non-registration, filing or non-filing of any person. 1998, c. 18, Sched. E, s. 189.

Offences

22. (1) Every person who,

(a) knowingly furnishes false information in any application under this Act or in any statement or return required to be furnished under this Act or the regulations; or

(b) contravenes section 6 or 12 or subsection 18 (4),

and every director or officer of a corporation who knowingly concurs in such furnishing or contravention is guilty of an offence and on conviction is liable to a fine of not more than $25,000 or to imprisonment for a term of not more than one year, or to both. R.S.O. 1990, c. O.31, s. 22 (1).

Corporation

(2) Where a corporation is convicted of an offence under subsection (1), the maximum penalty that may be imposed upon the corporation is $100,000 and not as provided therein. R.S.O. 1990, c. O.31, s. 22 (2).

Limitations

(3) A proceeding under clause (1) (a) shall not be commenced after the first anniversary of the day on which the facts upon which the proceeding is based first came to the knowledge of the Registrar. 1998, c. 19, s. 185 (3).

Same

(4) A proceeding under clause (1) (b) shall not be commenced after the second anniversary of the day on which the facts that gave rise to the offence were discovered. 1998, c. 19, s. 185 (3).

By-laws

23. (1) The Corporation may make by-laws,

(a) governing applications for registration of vendors and builders and the expiration and renewal of registration;

(b) prescribing the terms and conditions of registration;

(c) requiring the payment of fees on applications for registration or renewal of registration and prescribing the amounts thereof;

(d) prescribing the fees payable by builders to the Corporation in respect of the construction of a home or any class of home;

(e) governing applications for and the issuance of certificates under subsection 13 (3);

(f) governing agreements entered into between the Corporation and vendors or builders;

(g) providing for the establishment and maintenance of the guarantee fund and governing procedures for claiming and determining claims for compensation from the guarantee fund;

(h) governing the procedures for conciliation of disputes and providing for the payment and refunding of fees respecting requests for conciliation;

(i) prescribing classes of dwellings that are homes;

(j) specifying warranties in addition to those provided for in clause 13 (1) (a) or (b) and the time of expiration thereof;

(k) defining major structural defects for the purpose of clause 13 (1) (b);

(l) requiring vendors and builders to be bonded or to provide other security in such form, on such terms and with such collateral security as are prescribed, and providing for the forfeiture of bonds or other security and for the disposition of the proceeds;

(l.1) specifying information that a person is required to include in a claim for compensation from the guarantee fund;

(m) subrogating the Corporation or a named insurer to any right of recovery of a person in respect of a claim paid out of the insurance under the Plan and costs and providing the terms and conditions under which an action to enforce such rights may be begun, conducted and settled;

(m.1) allowing prescribed persons to inspect homes during or after their construction and requiring builders or vendors to pay the costs of the inspections;

(n) prescribing any matter required or authorized by this Act to be, or referred to in this Act as, prescribed by the regulations;

(o) prescribing forms for the purposes of the Corporation and forms for claims for compensation from the guarantee fund. R.S.O. 1990, c. O.31, s. 23 (1); 1994, c. 27, s. 94; 1998, c. 18, Sched. E, s. 190; 1998, c. 19, s. 185 (4-7).

Legislation Act, 2006, Part III

(2) A by-law passed under subsection (1) shall be deemed to be a regulation to which Part III (Regulations) of the Legislation Act, 2006 applies. R.S.O. 1990, c. O.31, s. 23 (2); 2006, c. 21, Sched. F, s. 136 (1).

Act binds Crown

(3) This Act, except sections 6 to 10, binds the Crown. R.S.O. 1990, c. O.31, s. 23 (3).

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