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MVDA

Ontario's Motor Vehicle Dealers Act (MVDA) requires anyone who wishes to engage in the trade of motor vehicles to register under the MVDA. The MVDA sets out criteria for registration, and also sets out some of the requirements which must be fulfilled by those engaging in the business of buying and selling vehicles. OMVIC administers the MVDA on behalf of the Minister of Government and Consumer Services.

What’s New in the MVDA 2002?
  1. Penalties for offences against the MVDA have been increased. If a person “furnishes false information” or fails to comply with the Act or the General Regulations, this person can be fined and/or imprisoned. Similarly, if an officer or director of a corporation that is a dealer “fails to take reasonable care” to prevent the corporation from committing such an offence, that person can be fined and/or be imprisoned. The maximum penalty for an individual is:
    1. A fine of $50,000 and/or
    2. Imprisonment for two years less a day.
    The maximum fine for a corporation is $250,000.
    The minimum penalty for an individual acting as a salesperson or as a dealer without being registered is $2,500.
  2. Dealers and salespeople must abide by the Code of Ethics Regulations. If a dealer or salesperson violates the Code of Ethics Regulations, he or she can be brought before a Discipline Committee.
  3. The MVDA specifies several new classes of dealers:
    • General Dealer – new and used vehicles
    • General Dealer – used vehicles
    • Broker
    • Outside Ontario Dealer
    • Wholesaler
    • Exporter
    • Lease Finance Dealer
    • Fleet Lessor – commercial lessor.
  4. There are increased requirements for dealers and salespersons to notify OMVIC of significant changes to the information provided to OMVIC on registration or upon renewal of registration.
  5. OMVIC is now obliged to make available to the public significant information regarding dealers and salespeople (including charges laid and/or conviction of an offence).
  6. The requirements for disclosure by dealers to customers (and in dealer-to-dealer transactions) have increased significantly. Disclosure must be “clear and truthful” and any representations (including advertising) must be “legal, decent, ethical and truthful.”
  7. All customers (not just “consumers”) other than registered dealers will be entitled to cancel a contract within 90 days if there was not adequate disclosure of branding, of the vehicle’s make, model and model year, of previous use as a police vehicle, emergency services vehicle, limo or taxi, or in some cases as a daily rental, or of the distance driven (within certain margins of error).
  8. General Dealers (only) must set up a trust bank account for any individual deposit over $10,000 and for any monies received for a consignment transaction when the consignor is an individual who purchased the vehicle for personal or family use.
  9. The maximum Compensation Fund payout to a consumer for any one individual transaction has been increased to $45,000 from the previous $15,000.
  10. OMVIC can appoint a “receiver and manager” to take control of a dealership and can issue a “freeze order” to seize the assets of a dealer or an alleged curbsider.
  11. A dealer may be required to submit its advertising to the Registrar for pre-approval for up to two years.
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