Toronto, Ontario -- July 4, 2016 -- New rules are now in effect if you repair, tow or store vehicles in Ontario. The new regulations under the Repair and Storage Liens Act (RSLA) officially took effect on July 1, 2016. Further regulations under RSLA will come into force starting January 1, 2017.
The new RSLA rules apply to any individual or company that repairs or stores a motor vehicle, and who claims a lien as a "repairer" or "storer."
The following new rules come into effect on July 1, 2016:
- If a vehicle being stored is subject to a lien and is received from someone other than its owner or a person having the owner's authority, then the storer must give notice to the owner and other interested parties of the lien in writing (e.g. secured parties who have registered their interest, such as lease and finance companies). Please note that someone may act on behalf of a consumer if the consumer is unable to give authorization as a result of the circumstances that required the tow and/or towing services, or if the consumer has been removed from the scene of an accident.
- For vehicles registered in Ontario, the notice period is reduced from 60 days to 15 days after the day after the vehicle is received. If notice is not provided within 15 days, a storer's lien is limited to the unpaid amount owing for that period. The 60-day notice period remains unchanged for out-of-province vehicles.
- Storers now have the option to give written notice by fax or e-mail. Previously, notice had to be given personally, sent by certified or registered mail or via prepaid courier. These options continue to be available.
- If no amount has been agreed upon for repair and storage costs, fair value may be determined by a court. There is a new list of discretionary factors a judge will be required to consider (such as fixed costs, variable costs, direct costs, indirect costs, profit and any other relevant factors).
Some of the RSLA rules will relate to new regulations under the Consumer Protection Act (CPA), and come into effect on January 1, 2017. The CPA changes will require towing and storage service providers to:
- Get permission from a consumer or someone acting on behalf of the consumer (that is, in the event a consumer has been removed from the scene of an accident) before providing or charging for towing and storage services.
- Record the name and contact information of the consumer or the person giving the authorization, along with the date and time of authorization.
- Disclose certain information, in writing, such as the provider's business name, contact information and address where the vehicle will be towed.
- Make a current statement of rates available at all business premises, on a website (if one is maintained) in a form that can be reproduced, and provide a copy to any person upon request.
- Provide an itemized invoice, listing services provided, the cost for each service and the total cost before demanding or receiving payment.
- Accept credit card payments from consumers (and not insist on cash only).
- Provide a consumer (or someone acting on their behalf) with access to the towed vehicle, at no charge, so that they may remove personal property between 8 a.m. and 5 p.m. on business days.
- Tow and storage providers will be prohibited from recommending repair and storage facilities, legal service providers or health care service providers, unless a consumer or a person acting on their behalf specifically asks, or the provider offers to make a recommendation and that person agrees.
- Disclose to a consumer whether the provider is getting a financial reward or incentive for towing a vehicle to a particular storage or repair shop.
- Establish minimum insurance coverage including general liability insurance of $2 million, customer vehicle insurance of $100,000 and $50,000 cargo insurance.
- Maintain authorization and disclosure records, invoices, copies of insurance policy, and statements of rates for three years.
It is worth noting that some exemptions will be made for certain tow and storage providers. For example, certain disclosures, authorization, invoices and related record-keeping requirements will not be required if services are provided under a prepaid agreement or membership in an association, such as the Canadian Automobile Association (CAA). This is because the consumer is not being charged for the specific service being provided. These exemptions will also apply when the tow and storage services are provided when a vehicle is purchased or leased and the consumer is not charged for the specific service being provided.
In addition, when a vehicle is towed and stored for law enforcement purposes or detained or impounded under other statutes, regulations or municipal by-laws, or as a result of a lawful power of seizure, a limited number of the new rules will apply. While these tows are not initiated by a consumer, the consumer is generally responsible for charges. The new regulation will protect the consumer, for example, by requiring the provider to make available publicly a current statement of rates, post identifiers and other information. The consumer must still be offered the option to pay by credit card.
Maximum Lien for Tow and Storage Services
The maximum amount of a lien for tow and storage services may be subject to restrictions under the CPA.
A tow and storage provider cannot charge a greater amount just because the cost is to be paid by an insurer or another third party, or is being impounded or detained for law enforcement purposes. Note that this rule does not apply in the case of law enforcement, if there is an agreement in place that contains terms of payment.
If an authorization includes an estimate, the amount charged may not exceed it by more than 10 percent. However,the consumer or a person acting on their behalfcan agree to change the estimate if they require additional or different services.
All tow operators must hold a valid CVOR (Commercial Vehicle Operators Registration) certificate by January 1, 2017. If you do not already hold a valid CVOR certificate, you are urged to meet this new requirement by the January 1, 2017 deadline.
For more information on CVOR applications, please visit the CVOR page at mto.gov.on.ca.