The Province is looking to update this legislation.
When it comes to real estate, the biggest impact will be furnace rentals and the like.
Long-term Leases
The concern is “purchase-cost plus leases,” that is, leases or rental agreements whereby the homeowner eventually pay more than they would to buy the leased/rented item at the outset.
The Ministry proposes to
- establish a cooling-off period for certain leases,
- increase disclosure requirements to improve consumer understanding of such leases before they enter into the contract, and
- set limits on termination costs if a consumer wishes to end the contract early.
The Ministry is proposing to apply similar “credit agreement repayment principles” in the Act to purchase-cost-plus lease contracts.
For example, a homeowner who ends a purchase-cost-plus lease early would only owe a portion of the cost of the leased item, which would take into consideration their payments to that point. The calculation of a maximum permitted termination cost would be set out in regulation.
Right now, the furnace may cost $6,000.00, but if you rent it, whether it’s been one month or one year, the payout under the contract is $12,000.00. This type of conduct needs to stop.
This legislation needs to updated as soon as possible.
Brian Madigan LL.B., Broker