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Consumer Protection (Ontario) Law - Sector-Specific
Time Share Agreements
(01 July 2013)- Overview
- Content and Disclosure Requirements
- Early Consumer Cancellation
- Amendment, Renewal and Extension Regardless of Related Consumer Agreement Terms
(a) Overview
(b) Amendment, Renewal or Extension Requirements
(c) Effective Date
(d) Early Consumer Cancellation Rights Renewed for Time Shares
(e) Original 'Form' of Time Share Agreement Preserved
- Remedies
(a) Overview
(b) General CPA Civil Remedies
. Overview
. Rescission
. Restitution
. Right of Civil Action
. Special Credit Card Remedies
. Common Law Right of Action Preserved
(c) Sector-Specific Remedies
(d) Unfair Practices
- Exemptions
(a) Payday Loans
(b) Real Estate Purchase, Sales and Lease Agreements
CAUTION #1
This chapter involves law from the Ontario Consumer Protection Act (CPA). Anyone considering using the CPA should first carefully sort out which of its rules apply to their situation. DO NOT ASSUME THAT BECAUSE YOU FOUND THE CHAPTER DEALING WITH THE RELEVANT ECONOMIC SECTOR THAT YOU HAVE ALL THE RIGHT RULES. The steps to do this properly are explained at this link:
Identifying Which CPA Rules Apply to Your Situation
CAUTION #2
re "Vacation Clubs"
Note that the CPA 20(1) provision quoted below (defining a "time share") excludes paragraph (b). Paragraph (b) sets out the definition for 'vacation clubs', which are the subject of their own sector-specific chapter of that name. For reasons of drafting simplicity (certainly not interpretive simplicity), the CPA includes 'vacation clubs' within the larger - and quite distinct - category of time shares. Be aware of this distinction especially when considering the rule conflict provisions set out in Part C, Ch.4.
1. Overview
The Consumer Protection Act (CPA) defines "time share agreements" as follows [CPA 20(1)]: CPA 20(1)
"time share agreement" means a consumer agreement by which a consumer,
(a) acquires the right to use property as part of a plan that provides for the use of the property to circulate periodically among persons participating in the plan, whether or not the property is located in Ontario, ... Note the specific mention that the time share property need not be physically located in Ontario. Generally, the CPA applies as long as "the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place' [CPA 2(1)].
2. Content and Disclosure Requirements
All time share consumer agreements must be in writing, be signed by the both parties, be delivered to the consumer and contain the following disclosure [CPA 27; Reg 26(1)]:- Consumer Name
- Supplier Name
If supplier is a proprietor, partnership or corporation, their legal name. If supplier is using a business name, that name too.
- Contact Information of Supplier
The telephone number and business address of the supplier, and information respecting other ways, if any, in which the supplier can be contacted by the consumer, such as their fax number and e-mail address.
- Names of Supplier Agents
The names of persons (if any) who solicited and negotiated with the consumer, and the name of the person who concluded the agreement with the consumer.
- Contracted Property Manager (If Any) Contact Information
With respect to a time share, and unless the supplier will be doing property management in-house (ie. with their own employees), the name and telephone number of the property manager and information respecting other ways, if any, in which the property manager can be contacted by the consumer, such as their fax number and e-mail address.
- Date When and Place Where Agreement Executed
- Date of Commencement and Term of Agreement
The commencement date of the agreement, and its term (duration) - even if indefinite.
- Description of Consumer Rights
A fair and accurate description of the consumer's rights in respect of the use of the property that is the subject of the agreement, including,
- it's precise location,
- the precise suite or the type of suite that the consumer will have the right to occupy,
- the periods during or the dates on which the consumer will have the right to use the property,
- the goods and services, including facilities, that will be provided to the consumer or to which the consumer will have access, together with any conditions attached to, and any restrictions and limitations on, the use of or access to these goods and services, and
- any conditions attached to, and any restrictions and limitations on, the consumer's right to dispose of the time share the consumer is acquiring under the agreement.
- Details Regarding Use of Substitute Property
If the consumer agreement provides for the consumer using a sustitute property, details respecting such rights, including:
- the times at which the right may be exercised,
- the method by which the right is to be exercised,
- the amounts payable by the consumer in connection with exercising the right, including terms and methods of payment, and
- the name of the individual or entity responsible for co-ordinating the substitution and information respecting the various ways in which the individual or entity can be contacted by the consumer, such as their telephone number, fax number and e-mail address.
- Details Regarding Property Exchange
If the consumer agreement provides for the consumer exchanging a right to "occupy a precise suite or a type of suite for a right to occupy a different suite or type of suite", details respecting such rights, including:
- the times at which the right may be exercised,
- the method by which the right is to be exercised,
- the amounts payable by the consumer in connection with exercising the right, including terms and methods of payment and
- the name of the individual or entity responsible for co-ordinating the exchange and information respecting the various ways in which the individual or entity can be contacted by the consumer, such as their telephone number, fax number and e-mail address.
- Payment Terms Listed
An itemized list setting out,
- the amount of the one-time consumer payment upon entering into the agreement and the goods or services for which it is payable, including terms and methods of payment,
- the amount of each additional one-time consumer payment and the good or service for which it is payable, including terms and methods of payment and
- the amount and frequency of the periodic consumer payments and the good or service for which each payment is payable, including terms and methods of payment.
- Optional Goods and Services List, With Prices
An itemized list setting out each optional good and service, including a facility and a membership, that the supplier represents will be available to the consumer, and it's cost - including terms and methods of payment.
- Changes in Payment Amounts and Extra Charges
If any of the amounts set out in the agreement is subject to change or if the consumer may be required to make a payment in addition to the payments set out in the agreement,
- a statement to that effect,
- a description of the circumstances in which the amount may change or the additional payment may be required, including terms and methods of payment and
- either, what the changed amount or the additional payment will be or the objective standard that will be applied to determine the changed amount or the additional payment, including terms and methods of payment.
- Trade-In Details
If the agreement includes a trade-in arrangement, a description of the trade-in arrangement and the amount of the trade-in allowance.
- Currency
The currency in which amounts are expressed, if it is not Canadian currency.
- Consequences of Non-Payment
The consequences of non-payment of any consumer amount.
- Consumer Information Statement [CP Reg 26(2,3)]
The following statement:
- "which shall be in at least 10 point type, except for the heading which shall be in at least 12 point bold type', and
- "which shall appear on the first page of the agreement, unless there is a notice on the first page of the agreement in at least 12 point bold type indicating where in the agreement the statement appears":
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Your Rights under the Consumer Protection Act, 2002
You may cancel this agreement at any time during the period that ends ten (10) days after the day you receive a written copy of the agreement. You do not need to give the supplier a reason for cancelling during this 10-day period. If the supplier does not make delivery within 30 days after the delivery date specified in this agreement or if the supplier does not begin performance of his, her or its obligations within 30 days after the commencement date specified in this agreement, you may cancel this agreement at any time before delivery or commencement of performance. You lose the right to cancel if, after the 30-day period has expired, you agree to accept delivery or authorize commencement of performance.
If the delivery date or commencement date is not specified in this agreement and the supplier does not deliver or commence performance within 30 days after the date this agreement is entered into, you may cancel this agreement at any time before delivery or commencement of performance. You lose the right to cancel if, after the 30-day period has expired, you agree to accept delivery or authorize commencement of performance.
In addition, there are other grounds that allow you to cancel this agreement. You may also have other rights, duties and remedies at law. For more information, you may contact the Ministry of Consumer and Business Services. To cancel this agreement, you must give notice of cancellation to the supplier, at the address set out in the agreement, by any means that allows you to prove the date on which you gave notice. If no address is set out in the agreement, use any address of the supplier that is on record with the Government of Ontario or the Government of Canada or is known by you. If you cancel this agreement, the supplier has fifteen (15) days to refund any payment you have made and return to you all goods delivered under a trade-in arrangement (or refund an amount equal to the trade-in allowance).
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- Additional Consumer Information Statement If Consumer Entitlement to Goods
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If the supplier requests in writing repossession of any goods that came into your possession under the agreement, you must return the goods to the supplier?s address or allow one of the following persons to repossess the goods at your address:
The supplier. A person designated in writing by the supplier.
If you cancel this agreement, you must take reasonable care of any goods that came into your possession under the agreement until one of the following happens:
The supplier repossesses the goods. The supplier has been given a reasonable opportunity to repossess the goods and twenty-one (21) days have passed since the agreement was cancelled. You return the goods.
The supplier directs you in writing to destroy the goods and you do so in accordance with the supplier?s instructions.
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General requirements for disclosure are explained at this link:
General Disclosure Requirements
3. Early Consumer Cancellation
The consumer has the right (without reason) to cancel the time share consumer agreement anytime from execution to 10 days after the date that they receive a written copy of the consumer agreement [CPA 28(1)].
Further, where the consumer has not yet received a copy of the consumer agreement that complies with the content and disclosure requirements of s.2 above, they have the right to cancel the consumer agreement within one year from it's execution [CPA 28(2)].
Both forms of cancellation require Notice to be given by the consumer to the supplier. Consumer-issued notice procedures are discussed in Part C, Ch.7, s.7: "CPA Civil Remedies: Consumer-Issued Notice Procedures".
4. Amendment, Renewal and Extension Regardless of Related Consumer Agreement Terms
(a) Overview
Time share agreements may be amended, renewed or extended in accordance with the following requirements, regardless of whether the original agreement provides for such changes or not [CP Reg 41(1)].
(b) Amendment, Renewal or Extension Requirements
These requirements are that [CP Reg 41(2)]:- the supplier or the consumer makes a proposal for amendment, renewal or extension;
- the other party explicitly accepts the proposal. Mere acknowledgement of receipt of the proposal does not constitute acceptance [CP Reg 41(3)];
and
- the supplier provides disclosure to the consumer updating the applicable original disclosure information required (as per see s.2 above). This requirement applies even if the proposal to amend, renew or extend was from the consumer.
(c) Effective Date
Any amendment, renewal or extension so made is effective on the date set out in the proposal, but only IF the proposing party "provides a written copy of an updated version of the agreement to the consumer within 45 days after" they have agreed to the proposal [CP Reg 41(4)]. The agreement cannot effect party rights prior to the effective date [CP Reg 41(5)].
(d) Early Consumer Cancellation Rights Renewed for Time Shares
An amendment, renewal or extension made in accordance with these procedures also renews the consumer's right to one form of early cancellation of the consumer agreement (see s.3 above) [CP Reg 41(6)]. This right, respecting the original making of the consumer agreement, is available - without reason - from the date that the consumer agreement commences and then up to 10 days after a copy of the consumer agreement is delivered to the consumer.
Logically, this 'new' cancellation right runs from the date that the proposal is accepted and then up to 10 days after the date that the supplier delivers the updated consumer agreement to the consumer.
The other cancellation right discussed in s.3, that available for a year after the agreement is executed if the supplier fails to deliver a CPA-compliant copy of the consumer agreement, is NOT renewed on amendment, renewal or extension of the consumer agreement.
(e) Original 'Form' of Time Share Agreement Preserved
Despite having been amended, renewed or extended in accordance with these rules in a manner that would otherwise change its original characterization as a time share agreement, the agreements retains its original status [CP Reg 43].
This provision avoids the invocation of rules that apply to different 'forms' of consumer agreements as explained in Part C, Ch.3: "CPA Forms of Consumer Agreement". Without this provision, the particular manner of amendment, renewal or extension could subject the arrangement to new rules, and even potential conflict between rules as is discussed in Ch.4 "Rule Conflict Resolution".
5. Remedies
(a) Overview
In addition to the common law law remedies of tort, contract and restitution [discussed in Part A], CPA civil court remedies fall into three categories: 'general', 'sector-specific' (ie. those specific to the 'time share' sector), and 'unfair practices'.
Non-compliance with any of the general consumer rights [see Part C, Ch.5: "General Consumer Rights"] or with most of the sector-specific rights set out in this chapter can usually be addressed using the general remedies explained in Ch.7 ["CPA General Civil Remedies"]. These are summarized in (b) below.
Additionally, some 'time share'-specific early cancellation remedies are addressed in (c) below.
Any 'unfair practice' provisions (which deal primarily with 'false, misleading or deceptive' and unconscionable representations) which may have specific relevance to time shares are set out in (d) below.
As for non-civil court remedies, the CPA provides for a range of administrative Orders [see Part C, Ch.8: "Administrative Enforcement"] and regulatory prosecutions [see Part C, Ch.9: Prosecutions], neither of which are aggressively pursued by the Ministry of Consumer Services or the Director of the Consumer Protection Branch.
(b) General CPA Civil Remedies
. Overview
This is a summary of the general civil remedies available to consumers under the CPA. The full version of this discussion is at Part C, Ch.7: "General Civil Remedies".
These remedial provisions apply to violations of general CPA consumer rights such as illegal charges and prohibitions against negative-option contract formation [see Part C, Ch.5: "General Consumer Rights"] - and as well to non-compliance with most of the sector-specific rights set out in this chapter.
. Rescission
Typically, supplier (here 'repairer') non-compliance with any CPA right allows the consumer to cancel the consumer agreement at their election, on the delivery of a Notice of Cancellation to the supplier. Consumer-issued notice procedures are discussed in Part C, Ch.7, s.7: "CPA Civil Remedies: Consumer-Issued Notice Procedures".
However the form of cancellation (properly: 'rescission') used in the CPA does not just end the consumer's duties under the consumer agreement from the date of cancellation and then forward into the future. Rather the cancellation or rescission is 'ab initio' ('from the beginning' of the consumer agreement).
. Restitution
This form of 'ab initio' cancellation then necessitates that both parties, consumer and supplier alike, engage in post-cancellation restitution to each other respecting all that has passed between them since the consumer agreement commenced. Typically this involves the return of goods by the consumer and the return of monies paid by the supplier. In the case of past services performed or perishable goods typically a value compensation provision is imposed on the consumer.
Consumer restitution duties are sometimes complex, so readers should be sure to review carefully both sections 5 and 6 in Part C, Ch.7 "General Civil Remedies".
From the point that Notice of Cancellation is delivered, both parties are under specific timelines to complete their specific restitution duties.
. Right of Civil Action
Failure of a party to fulfil their restitution duties in the time required then automatically triggers a right of civil action in the aggrieved parties (the original Notice of Cancellation doubling as a de facto 'demand' notice). Most such claims will be suited to the Small Claims Court with its newly-raised $25,000 monetary jurisdiction, and parallel jurisdiction over the return of chattel property to the same dollar value.
Civil action is also a possibility in some cases where the consumer has not rescinded the consumer agreement fully, for example with the case of illegal charges. In that case there is still a 'Notice' requirement, but after the failure of the supplier to refund the monies the consumer can sue.
. Special Credit Card Remedies
Further, where consumer payments which are now subject to restitution were originally made by credit card, the consumer has a 'back up' right to demand, and then proceed in court, against the credit card issuer should the supplier remain in default of their restitution duties.
. Common Law Right of Action Preserved
The CPA rights of action do not prohibit use of common law remedies in tort, contract and restitution and claims may (and when called for, should) be advanced both under the CPA and common law causes of action.
(c) Sector-Specific Remedies
The CPA rules discussed in this chapter add the sector-specific remedies of early consumer cancellation discussed in s.3 above, which rules also apply in the case of amendment, renewal or extension as is discussed in s.4(d) above.
(d) Unfair Practices
'Unfair practices' are discussed at length in Part C, Ch.6. They primarily address 'false, misleading or deceptive' and unconscionable representations.
Specific 'unfair practices' which may relate to time shares include:- False or Misleading Representation Re Quality of Goods or Services
"A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not."
This category resembles certain 'conditions and warranties' implied into consumer agreements by the CPA, and as well some imported into the CPA from the Sales of Goods Act. These are discussed in Part C, Ch.5, s.3: "General Consumer Rights: Warranties and Conditions Preserved".
- False or Misleading Representation Re Reason for Availability of Goods or Services
"A representation that the goods or services are available for a reason that does not exist."
A fact example of this might be a false or misleading representation that a time share came into the supplier's possession as the result of a forced sale, implying that the supplier got it inexpensively before the original owner had used it much, and is in turn selling it inexpensively.
- Deceptive or Negligent Representation Re Availability of Goods or Services
"A representation that the goods or services or any part of them are available or can be delivered or performed when the person making the representation knows or ought to know they are not available or cannot be delivered or performed'"
This addresses situations where people try to sell goods or services that are not available in order to get a sale now, and then come up with delaying excuses later. In light of the next-following example, this one must refer to the COMPLETE unavailability (that even waiting won't fix) of the goods or services.
- False or Misleading Representation Re Timing of Availability
"A representation that the goods or services or any part of them will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know they will not be available or cannot be delivered or performed by the specified time."
- False or Misleading Representation Re Price Advantage
"A representation that a specific price advantage exists, if it does not."
A fact example of this would be a false or misleading representation that the goods or services are 'half regular price', when they are not - or perhaps a false "going out of business sale". Pricing gimmicks are numerous and will be as varied as the imagination of suppliers. Each should be examined for its truth and forthrightness.
- False or Misleading Representation Re Material Facts
"A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive."
A 'material fact' is one which is pivotal to your decision to make a purchase.
- Misrepresentation Re Purpose of Charge
"A representation that misrepresents the purpose of any charge or proposed charge."
This category both includes and exceeds the making of a charge for a good or service that was simply not provided (ie. simple mistake or fraud). Were it so limited, simpler language such as a "charge for a good or service not provided" would have sufficed.
It may include attempts by unscrupulous suppliers to impose 'extra charges' on top of the principal amount negotiated for, in a bald attempt to squeeze more money out of the consumer. They usually have banal characterizations such as 'transaction fees', 'administration fees', etc where no significant or unusual reason exists to justify such charges.
6. Exemptions
(a) Payday Loans
I can't imagine how a "time share agreement" could also meet the definition of a "payday loan", but payday loans are listed as exempt from the provisions discussed in this chapter [CP Reg 9(3)].
I plan to do a separate Legal Guide for payday loans, which will be included in Part B of this Isthatlegal.ca Consumer Law Guide. In the meantime, readers may want to consult the Payday Loans Act directly.
Payday Loans Act
(b) Real Estate Purchase, Sales and Lease Agreements
While real estate purchase, sales and lease agreements are generally exempt from the CPA, time shares ARE subject to both the rules set out in this chapter and the general CPA rules set out in Part C [CPA 2(2)(f)].
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