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Commercial Lessors and Ontario's New Motor Vehicle Sales and Dealership Act

BY Jonathan Fleisher
March 31, 2009

On Jan. 1, 2010, the long-awaited Ontario Motor Vehicle Dealers Act, 2002 (the “MVDA” or the “Act”) and its two Regulations will come into force. The Act was to come into effect on April 1, 2009, but for a variety of reasons, as will become clear, the Ministry delayed implementation. The impact of this legislation is far-reaching to any person who sells, leases, or finances motor vehicles (consumer or commercial) in the Province of Ontario. The legislation is both a quasi-consumer protection act and a regulatory document combined into one. It is complex. A complete summary is beyond the scope of this article. This article focuses on some of the broad concepts that are applicable to all persons dealing in motor vehicles, with a particular emphasis on commercial finance. As will become clear, the Act, while having some helpful consumer protection provisions, may have a strong negative impact on dealers and the finance market generally.

Background and Overview

The most fundamental change under the MVDA is to eliminate a single class of dealers and to replace the single class with seven different classes of registrants. Each class has its own set of obligations and exemptions under the Act, with the most complex and most highly regulated being the general dealer.

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