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Feb 12, 2018

Ontario Publishes Documentation Requirements for Exempt HVAC Door-to-Door Transactions

By David Stevens

Recently, we wrote about new provisions of the Ontario Consumer Protection Act (CPA) that will prohibit a range of door-to door consumer transactions. The new rules, which come into effect on March 1, 2018, will make unsolicited “direct agreements” unenforceable for HVAC equipment and other items such as water heaters, air cleaners and water treatment equipment (“prescribed goods and services”). There are some exceptions to the overall ban on direct agreements for prescribed goods and services. Generally, if the consumer initiates contact with the supplier and asks the supplier to come to the consumer’s home, then the supplier is permitted to solicit and/or complete a direct agreement for prescribed goods and services at the consumer’s home. Such transactions are exempt from the general prohibition against direct agreements for prescribed goods and services.

The Ontario government recently published a Disclosure Statement that must be signed by each consumer entering into a direct agreement for a prescribed good or service. The Disclosure Statement will be found as the first page of a direct agreement for a prescribed good or service. The standard form requires the consumer to check a box indicating that either “You contacted the supplier to invite them to your home to buy or lease at least one of the products above (not for repair, an energy assessment, maintenance, or any other reason)” or “You agreed to allow your current supplier to come to your home and agreed they may offer you a contract for one of the products or services listed above.” Presumably, having this form completed will provide the supplier with confirmation that the direct agreement fits within the exemptions from the general prohibition against direct agreements for prescribed goods and services.

The Ontario government has also issued a new Regulation (O. Reg. 18/08) setting out requirements for permitted direct agreements for prescribed goods and services. The newly-published requirements for direct agreements for prescribed goods and services are more detailed than the requirements for other direct agreements (which are found at section 35 of the General Regulation under the CPA). Among the additional or different items that must be disclosed or included in permitted direct agreements for prescribed goods and services are the following:

  • The prescribed Disclosure Statement, which must appear as the first page of the direct agreement;
  • A description of any existing written agreement between the same parties for a prescribed good or service (including start and end date);
  • A statement about whether the prescribed goods are used or reconditioned;
  • Where the consumer is already leasing a prescribed good from a different supplier, then details must be provided about the name of the other supplier, the serial number or identifier of the leased good and whether the new supplier is responsible to remove the existing leased good and pay any associated costs;
  • Where the agreement is a lease for a prescribed good, it must include a reasonable estimate of the retail price and the total amount payable over the average useful life of the leased good (even if that is different from the term of the lease);
  • An itemized list of any additional charges (including delivery, installation, late payment);
  • The total amount payable;
  • A list of any charges to the consumer for terminating the agreement (such as charges for early termination), and if the charges vary over time, a schedule of the amounts chargeable, including taxes;
  • All guarantees and security given in respect of money payable under the agreement;
  • All credit agreements and other payment instruments, including promissory notes, related to the agreement;
  • A list of all other agreements that are related to the direct agreement and that were entered into at the time the parties entered into the direct agreement; and
  • A statement that the supplier warrants that the prescribed good or service will work for the term of the agreement.

All of the new rules come into effect on March 1, 2018.

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