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This webinar is brought to you by Community Law School (Sarnia‐Lambton) Inc., a nonprofit, Community Law School (Sarnia Lambton) Inc., a nonprofit, registered charitable organization devoted to public legal education and community advocacy training. This webinar is facilitated by Your Legal Rights, a website of legal information for community workers and advocates who work with low income and disadvantaged communities in Ontario. Funding for this webinar was provided by the Law Foundation of Ontario as part of The Connecting Project and the Connecting Communities Consortium and the Connecting Communities Consortium.

www.communitylawschool.org www.yourlegalrights.ca www.lawfoundation.on.ca

Community Law School (Sarnia‐Lambton) Inc. 1

About our presenter…

( ) d d l Margaret Capes, B.A. (Hons.), LL.B., M.Ad.Ed, is Legal Education Coordinator of Community Law School (Sarnia‐ Lambton) Inc. She also acts as Review Counsel for ) Community Legal Services, as an adjunct professor in the clinical law program, and as faculty advisor for Pro Bono Students Canada and the Dispute Resolution Centre all at Students Canada and the Dispute Resolution Centre, all at the Faculty of Law, University of Western Ontario. She is the former Executive Director of Community Legal Assistance S i Sarnia.

Hot Topics in Consumer Protection: Surviving Home Renovations with the Consumer Protection with the Consumer Protection Act, 2002

3 2012, Community Law School (Sarnia‐Lambton) Inc.

Webinar Overview Webinar Overview

1. What is the Case Study Approach? 2. Case Study: Home Sweet Home and the Shady Contractor 3. Participants’ Experiences, Questions, and Answers Appendices: Appendix A: Background Materials Appendix A: Background Materials Appendix B: Case Study: Home Sweet Home and the Shady Contractor Appendix C: Resources

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What is a Case Study Approach? y pp

• Uses a fictionalized fact scenario (the “case study”) to illustrate how the

Consumer Protection Act, 2002 (CPA) operates in the “real world”. ( ) p

• Copies of the Background Handout and Case Study are provided to

registrants in advance of the live webinar, and are appended to the archived webinar slides webinar slides.

• Assumes that webinar participants have read the Background Handout and

Case Study prior to attending the live webinar (or prior to reviewing the y p g ( p g archived webinar).

• The webinar will focus on the Case Study provided.
• We also invite participants to share their experiences after we have worked

through the Case Study.

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Case Study: Home Sweet Home and the Shady Contractor

a) Are there examples of unfair practices in this case? How many can you identify? b) What problems exist with the following in this case:

i. The contract; ii. The estimate; iii Th t d lit f k iii. The warranty and quality of work; iv. Unsolicited goods and services?

) Wh t ti l d l f th T k d th i d ht c) What action plan can we develop for the Traskers and their daughter Angelina using the remedies available under the Consumer Protection Act, 2002?

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Appendix A: Background Materials

Overview 1 Unfair Practices and Home Renovations

• 1. Unfair Practices and Home Renovations
• 2. The Contract under the Consumer Protection Act
• 3. Estimates under the Consumer Protection Act

4 Warranties and Quality of Work

• 4. Warranties and Quality of Work
• 5. Unsolicited Goods or Services
• 6. Options for Action

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Appendix A: Background Materials, cont.

1 U f i P ti d H R ti

• 1. Unfair Practices and Home Renovations

Future performance contracts for home renovations are covered by the unfair practices sections of the CPA i. What are “unfair practices” under the Consumer Protection Act, 2002?

• The Consumer Protection Act, 2002 (CPA) specifically prohibits two types of unfair

practices:

• Making a false misleading or deceptive representation and
• Making a false, misleading, or deceptive representation, and
• Making an unconscionable representation.
• The CPA also prohibits a person from retaining custody or control of goods to force

a consumer into renegotiating the terms of the agreement. ii. What are “false, misleading, and deceptive representations” under the CPA?

• False, misleading, and deceptive representations fall generally into four categories:
• Representations as to the quality, characteristics, condition, or “special” nature
• f the goods or services;
• f the goods or services;
• The current or future availability of the goods or services;
• The need for the good or service; and
• The cost, price advantage, or benefit of the good or service to the consumer.

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, p g , g

Appendix A, Background Materials, cont.: What are “false, misleading and deceptive representations” under the Consumer Protection Act, 2002?

• The CPA includes the following as examples of false, misleading, or deceptive representations:

That the goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits, or qualities that they do not have; accessories, uses, ingredients, benefits, or qualities that they do not have; That the person supplying the goods or services has sponsorship, approval, status, affiliation or connection that the person does not have; That the goods or services are of a particular standards, quality, grade, style, or model, if they That the goods or services are of a particular standards, quality, grade, style, or model, if they are not; That the goods are new, or unused, if they are not or are reconditioned or reclaimed; That the goods have been used to an extent that is materially different from the fact; That the goods have been used to an extent that is materially different from the fact; That the goods or services are available for a reason that does not exist; That the goods or services have been supplied in accordance with a previous representation, if they have not; they have not; That the goods or services, or any part thereof, are available when the person making the representation knows or should know that they are not;

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Appendix A, Background Materials, cont.: What are “false, misleading and deceptive representations” under the Consumer P t ti A t 2002? Protection Act, 2002?

• That the goods or services, or any part thereof, will be available by a specified time when the

person making the representation knows or should know that they will not be available by that time; time;

• That a service, part, replacement or repair is needed or advisable, if it is not;
• That a specific price advantage exists, when it does not;
• That misrepresents the authority of a salesperson, representative, employee, or agent to

negotiate the final terms of the agreement;

• That the transaction involves or does not involve rights, remedies, or obligations if the

representation is false, misleading, or deceptive;

• That misrepresents the purpose or intent of any solicitation of, or communication with, a

consumer;

• That misrepresent the purpose of any charge or proposed charge; or
• That misrepresents or exaggerates the benefits that are likely to flow to a consumer if they

help a person obtain new or potential customers.

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Appendix A, Background Materials, cont.: What are “unconscionable representations” under the Consumer Protection p Act, 2002?

• iii. What are “unconscionable representations under the Consumer Protection Act, 2002?
• Some business practices are so egregious that they are deemed unconscionable under the
• CPA. They include:

Taking advantage of the disability, ignorance, language barriers, or illiteracy of the consumer; Grossly overcharging for the good or service; Using excessively one-sided or otherwise inequitable contracts to the detriment of the consumer; Obligations that the consumer has no reasonable probability of paying in full; Misleading statements of opinion that the consumer relies on or is likely to rely on, to their detriment; and Using pressure tactics to persuade the consumer to enter into the transaction.

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Appendix A, Background Materials, cont.: The Contract under the Consumer Protection Act, 2002 2. The Contract under the Consumer Protection Act, 2002

• If the home renovation contract is of services over $50 (which almost all are), and at

least one of the parties is in Ontario, it must be in writing.

• In all cases, there must be clear wording regarding the:
• Name of the contractor and any business names they use, their telephone

number(s), and address(es);

• The names of homeowner(s);

The names of homeowner(s);

• A detailed description of the work/services to be provided;
• An itemized list of prices (including taxes and associated fees), with a total amount

payable (with the currency indicated);

• The location where services are to be provided;
• The terms and methods of payment;
• When the work will start;
• The names of subcontractors; and
• The names of subcontractors; and
• The date the contract is entered into.
• the contract must also provide the purchaser with the expressed opportunity

to accept or decline the agreement, and to correct any errors prior to signing.

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Appendix A, Background Materials, cont.: Estimates under the Consumer Protection Act 2002 Estimates under the Consumer Protection Act, 2002 3. Estimates under the Consumer Protection Act, 2002

• Under the Consumer Protection Act, 2002, if a home renovations agreement includes an

estimate, the final price of the renovation cannot be more than ten (10) percent above the i i l ti t

• riginal estimate.
• If new work comes up, the contractor must discuss it with the homeowner, and ask the
• wner to approve a change order that includes the new work and a revised estimate to

pp g cover new costs.

• Purchasers should insist that these change orders are in writing.

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Appendix A, Background Materials, cont.: Warranties and Quality of Work, and y Unsolicited Goods or Services 4. Warranties and Quality of Work under the Consumer Protection Act, 4. Warranties and Quality of Work under the Consumer Protection Act, 2002

• The home renovator is deemed to warrant that the services or goods to be provided are of
• The home renovator is deemed to warrant that the services or goods to be provided are of

reasonably acceptable quality.

• This warranty is set out in the Consumer Protection Act, 2002, and applies whether the

h t id t ( ith b ll i iti ) home renovator provides one or not (either verbally or in writing).

5. Unsolicited Goods or Services under the Consumer Protection Act, 2002

• Purchasers are not required to pay for unsolicited goods or services provided by the

home renovator.

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Appendix A, cont.: Options for Action under

the Consumer Protection Act, 2002

i. Unfair Practices

• A consumer may rescind any agreement entered into while the other party engaged in an
• A consumer may rescind any agreement entered into while the other party engaged in an

unfair business practice under the Act.

• If rescinded, the agreement and all related agreements, guarantees, and payment security

are cancelled as if they never existed are cancelled as if they never existed.

• Notice of rescission must be given within one year after entering into the agreement

(written notice is recommended).

ii. Failure to Provide Copy of the Contract

• The homeowner may cancel within one year of entering the contract if a copy with all

required terms is not provided by the home renovator.

• Cancellation should be done in writing, and the homeowner should keep a copy of the

cancellation notice.

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Appendix A, cont.: Options for Action under

the Consumer Protection Act, 2002

iii. Failure to Provide Services

• If the delivery of goods or performance of services does not occur within 30 days of the

d i h h h l h i i i commencement date set in the contract, the purchaser may cancel the contract in writing.

• If there is no commencement date in the contract, the right to cancel starts within 30 days
• f entering into the agreement.

iv. Civil Lawsuits: Breaches of the Consumer Protection Act, 2002 and Warranty Issues

• The CPA allows for lawsuits for breach of contract.
• If damages can be proven as a result of breaches of the CPA, then the homeowner may

g p , y take the contractor to Small Claims or Superior Court for breach of contract.

• Additionally, given the warranty provisions in the CPA, it is possible a tort claim could

be launched if the work is substandard and damages can be proven.

• The limitation period for starting a claim is two (2) years from the date the breach is

discovered, under the Limitation Act, 2000.

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Appendix A, cont.: Complaint to the Ministry

• f Consumer Services

v. Complaint to the Ministry of Consumer Services

• The Ministry of Consumer Services has broad investigatory powers and can conduct an

i i i l i inquiry into any complaint.

• The Ministry can make an order directing a person to comply with the Act if it is

believed on reasonable grounds that a contractor has engaged or is engaging in any activity that contravenes any provision under the CPA activity that contravenes any provision under the CPA.

• The Ministry can also take the contractor to Provincial Offences Court for breaches of

the CPA. A i di id l h i i t d f ff d th CPA b li bl f fi f

• An individual who is convicted of an offence under the CPA can be liable for a fine of up

to $50,000, or imprisoned for a term of not more than two years less a day, or both. A corporation that is convicted of an offence under the Act is liable for a fine of up to $250,000.

• The Provincial Offences Court can also order restitution be paid to the homeowner as

part of the sentence.

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Appendix B: Case Study: Home Sweet Home and the Shady Contractor

Joe and Fiona Trasker, ages 81 and 82 respectively, take pride in their home and the fact they are still able to live independently. However, they moved into their home after marrying in 1946 so renovations have been needed over the years. Within the last year, the foundation began to crack, leaving water in the basement. Since the Traskers used the basement for storage, some property has been damaged. As well, Joe decided interlocking stone would be a good replacement for their worn out laneway. The cracks were becoming dangerous given both he and Fiona use walkers to get to their car. In spring of this year, Joe called Calvin Brunet of Ready Made Renovations after reading their advertisement in the community newspaper. Calvin explained he has 30 years experience working

• n foundations and laneways. He seemed knowledgeable about new products and the best ways to

d l ith th T k i i deal with the Traskers repair issues. Over a handshake, Joe arranged to have Calvin and his crew start the work on May 1. A $2000 deposit was issued by cheque. Calvin and his crew arrived and started the work on the basement. Aft 2 d C l i d i d t h d d t id th h t i ti t th t t f th After 2 days, Calvin advised a trench was needed outside the house to investigate the extent of the

• damage. With this news, Calvin asked for another $5000 to complete that step. The Traskers agreed,

trusting that Calvin would get to the bottom of the problems. The diagnosis was that the entire foundation would need to be sealed with a new product on the market, both inside and outside the

• house. Another $10000 was paid to cover these costs as the work continued.
• house. Another $10000 was paid to cover these costs as the work continued.

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Appendix B, cont.: Case Study: Home Sweet Home and the Shady Contractor

Meanwhile, another crew worked on the laneway. They pulled out the old concrete and installed the interlocking stone recommended by Calvin. They were the “top of the line” stones guaranteed to never crack or wear Calvin assured the Traskers to purchase anything less would be foolhardy and a never crack or wear. Calvin assured the Traskers to purchase anything less would be foolhardy and a waste of money. Being unfamiliar with interlocking stones, Joe shelled out another $8000 to cover these costs. The Traskers’ daughter Angelina came for a visit at the height of the renovations She was not The Traskers daughter Angelina came for a visit at the height of the renovations. She was not impressed with the work crews. They seemed to be on their cell phones a lot and frequently off to Tim Horton’s for a break. She asked to see the invoices to date after Joe mentioned their resources were starting to run short. After all, they had already paid $25000 and the work was not complete. Joe also mentioned that Calvin had driven him to the bank on 2 occasions to get certified cheques for the needed funds. Angelina called 2 reputable contractors and had them look at the work. They were convinced the Traskers were being overcharged for substandard work and shoddy products. The foundation sealant had been recalled in the previous year and the interlocking stones were prone to crumbling after the first winter. Wanting to help her parents, Angela is looking for steps she can take to correct this situation. What ld would you suggest?

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Appendix C: Resources

Ministry of Consumer Services, Consumer Protection Branch

• complaints about a business
• questions about your consumer rights

Phone: 416-326-8800, or 1-800-889-9768 Mail: TTY: 416-229-6986, or 1-877-666-6545 Consumer Protection Branch Facsimile: 416-326-8665 5775 Yonge St., Suite 1500 Toronto, ON M7A 2E5 Toronto, ON M7A 2E5 Email: consumer@ontario.ca Website: http://www.sse.gove.on.ca/mcs/en/pages/default.aspx Small Claims Court To pursue a claim before the Small Claims Court against an internet vendor under the Consumer Protection Act, 2002 if they have engaged in unfair practices or otherwise breached the Act or the law in general, it is important to review the Small Claims Court information and forms at the Ministry of Attorney General website: review the Small Claims Court information and forms at the Ministry of Attorney General website: http://www.attorneygeneral.jus.gov.on.ca/english/courts/scc

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This webinar was brought to you by Community Law School g y y y (Sarnia‐Lambton) Inc. and Your Legal Rights with funding from the Law Foundation of Ontario.

For more information about consumer issues visit the Consumer Law section of Your Legal Rights at www.yourlegalrights.on.ca. For more public legal information webinars, including webinars on

• ther consumer protection topics, visit:

wwwyourlegalrights on ca/training www.yourlegalrights.on.ca/training. For information about other consumer issues, social welfare laws, and community advocacy training visit the Community Law School and community advocacy training visit the Community Law School website at www.communitylawchool.org.

Community Law School (Sarnia‐Lambton) Inc.