Legislative Assembly of Ontario

THIRD READINGS

RESIDENTIAL COMPLEX SALES REPRESENTATION ACT

RESIDENTIAL COMPLEX SALES REPRESENTATION ACT

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The House resumed at 8 p.m.

THIRD READINGS

The following bills were given third reading on motion:

Bill 93, An Act to amend the Family Law Reform Act;

Bill 94, An Act to amend the Charities Accounting Act;

Bill 95, An Act to amend the Public Vehicles Act;

Bill 96, An Act to amend the Highway Traffic Act;

Bill 124, An Act to amend the Wages Act;

Bill 128, An Act to amend the Residential Complexes Financing Cost Restraint Act.

RESIDENTIAL COMPLEX SALES REPRESENTATION ACT

Hon. Mr. Elgie moved second reading of Bill 113, An Act to regulate Conveyances of Dwelling Units in Residential Complexes.

Hon. Mr. Elgie: Mr. Speaker, the act will protect people from being misled into certain forms of apartment ownership schemes. It will prohibit vendors of apartment buildings from leading people to believe they are buying a residential unit, the right to occupy a residential unit, or both, if they are only acquiring an interest in the building.

This bill applies to all residential buildings with seven or more units that are not regulated by the Condominium Act or the Co-operative Corporations Act. It affects two basic types of ownership schemes, corporation ownership and tenants-in-common ownership.

In the first category, building ownership is transferred to a corporation and shares in the corporation are sold to individuals. The individuals, by shareholders' agreement, grant one another the right to occupy specific units. Similarly, under the tenants-in-common scheme a building is sold to a group of individuals who enter into an agreement granting one another the right to occupy specific units.

In either case, the buyers are often led to believe that they can automatically move into the building when in fact they legally cannot. This is because the buyers are prohibited from evicting existing tenants under the Landlord and Tenant Act, administered by the Attorney General (Mr. McMurtry).

I would like to emphasize that this legislation will not restrict in any way the right to convey property by means of tenancy in common or corporate ownership. It simply puts a stop to representations that could grossly mislead buyers into thinking they are buying a home. The bill outlaws any advertisements, verbal representations or written agreements that state or imply that people are buying a unit or the right to occupy a unit now or in the future.

Under the bill, buyers who are misled in this way can cancel an agreement to purchase up until closing of the deal. Even after closing they can claim damages through the courts for expenses arising from the misrepresentation, such as living costs. Aside from possible consumer claims, building vendors or their agents who breach the proposed act will be liable to a fine of between $1,000 and $50,000, a year in jail or both. Corporations contravening the bill will face a fine of up to $100,000.

I think it is important to note that this bill recognizes that a vendor can provide a clear and accurate written statement of law on the right of occupancy. The statement could, for instance, advise a buyer of his right to occupy a unit when and if the current tenant chooses to move out.

As I have already mentioned, this legislation does not apply to condominium sales or to the sale of units owned by co-operatives. It also does not apply to the sale of interests by vendors who occupy units and who can so guarantee the buyer a right to occupancy. Under the act there is ample room for future exemptions to deal with specific unfair circumstances.

This act will replace the outmoded section of the Condominium Act dealing with ownership schemes.

Mr. Boudria: Mr. Speaker, I wish to say a few words on behalf of our party on Bill 113, An Act to regulate Conveyances of Dwelling Units in Residential Complexes. Our party proposes to support this legislation.

There are a few concerns I would like to raise. I have raised one of them previously with the minister and he has agreed to amend it; as a matter of fact, we both prepared an amendment for it. Ours is a little bit different, although we intend to do the same thing, and in a few minutes I will show the minister the amendment I had in mind. They were both prepared by legislative counsel and somehow they got to be a little bit different.

Nevertheless, I am pleased to note that the minister intends to make a mobile home park a residential complex in so far as the definition of this bill is concerned. The concern we have about mobile home parks is that whenever we make laws for any type of housing or dwelling unit we seem to forget the 50,000 people in this province who live in mobile homes, or rather the 50,000 mobile home owners of this province; probably roughly twice that many people live in them, if not more.

8:10 p.m.

The big concern is that it is as important, if not more important, to protect those people who occupy a mobile home lot. As all honourable members know, it is always very expensive to move a mobile home whenever that has to be done. Mobile home residents deserve as good protection as anybody else, if not better, and we are glad to see that the minister is amending the bill to reflect this concern. I want to thank him and I am sure all residents of mobile homes will be pleased to see that we are indeed intending to afford them better protection as well.

The obvious concern, though, even once we have passed this bill, is of condominiums being created outside the actual intent of the law and, as I understand it, that is still going to happen. For instance, if a building has 20 units and 20 people buy it as shareholders, we now know that only one person can claim to be the owner and therefore only one unit can be occupied on behalf of the owner as opposed to all 20 of them each wanting a unit.

However, what happens as time goes by is that each time a unit is emptied it is then replaced with one of the co-owners of the building and we still get a condominium, which may or may not be wrong. However, I think it is interesting to note that it is circumventing municipal bylaws when that happens. In fact, we are creating a sort of de facto condominium in any case. The only exception, as I understand it, is that we are not throwing everybody out any more; and we cannot let anybody who buys shares believe that we can throw a resident out of his apartment. That is the way I understand the legislation to work.

But certainly, in so far as not being able to mislead anyone is concerned, that is very productive. However, the basic concern of us actually creating condominiums where we do not necessarily want to create them is still there. If that is not the case, I would hope the minister would elaborate for us later.

Frankly, I do not know what the solution is to that problem. I certainly do not advocate abolishing tenancy in common or corporate ownership of buildings. That would, as far as I am concerned, not be a very brilliant move or an adequate move, in any case, to solve that particular instance.

Perhaps there are other methods of dealing with that problem if it gets to be serious, and other legislative measures will then be necessary.

Of course, as I said previously, the co-owner type of affair requires no municipal consent whereas conversion to a condominium does. That is basically the issue that I wanted to raise.

I suppose those are all the comments that I have at the present time, recognizing that the minister has indicated to me and has circulated an amendment which he intends to bring in later and I want to discuss with him privately about the amendment that I had proposed to see which of the two amendments is the one that should be passed in order to ensure the maximum protection for mobile home owners.

Mr. McClellan: Mr. Speaker, the minister will understand perhaps if we express a certain degree of confusion with respect to Bill 113. I acknowledge this confusion quite frankly and candidly.

The present section 60 of the Condominium Act seems to me to be fairly clear and straightforward. It is being replaced by Bill 113. Section 60 reads:

"No person shall offer to sell any interest in land together with a grant of exclusive occupancy or use for residential purposes of part of a building located on the land where that person will retain an interest in the land as tenant-in-common with the offeree unless he does so as a declarant or proposed declarant under this act." The act is, of course, the Condominium Act.

I think I understand what that section of the Condominium Act means. What I do not understand is why that very clear section of the Condominium Act has not been used to eliminate the kind of scams and ripoffs that I know have been taking place in Metropolitan Toronto since the passage of the Condominium Act and that Bill 113 is ostensibly designed to deal with.

For example, I have had communication with a number of tenants at 80 and 100 Coe Hill Drive. Let me use that as a case example. A number of new Canadians have been sold units at 80 and 100 Coe Hill Drive through the agency of Lennox Real Estate. By and large, this real estate company has been making a sales pitch to recent Polish immigrants and telling them that if they buy a co-ownership in 100 Coe Hill Drive they will have occupancy rights to the apartments that are currently occupied by tenants of the landlord who owns 100 Coe Hill Drive.

A number of apartments were sold to purchasers who were given the impression through the documents they signed that they would have a right of occupancy of apartments that were already occupied by tenants who have security of tenure under the Landlord and Tenant Act. They paid variously between $20,000 and $40,000 for the purchase of these apartments on the usual three-mortgage scam deal, so they are paying an incredible amount of money for absolutely nothing. Under existing legislation they do not have the right of occupancy and they are paying something in the order of $250 a month against the three mortgages and $250 a month additional charges for something called maintenance and taxes. This is a pure ripoff scam.

I understand Bill 113 is designed to protect people against being victimized by precisely this kind of scam, but I really have some problems with the legislation in front of us. I intend to refer the bill to committee of the whole, not to drag it out but so that the minister and I can have some kind of dialogue and perhaps we can reach a meeting of the minds.

I do not understand why section 60 of the Condominium Act as it is written at present would not have prevented the kind of scam that took place at 100 Coe Hill Drive. I genuinely fail to understand why the existing legislation is not strong enough to protect people from the kind of ripoff Lennox Real Estate was perpetrating in the west end of Toronto.

The language is very clear. "No person shall offer to sell any interest in land together with a grant of exclusive occupancy ... of any part of a building located on the land." I do not know what could be clearer than that. We have a piece of legislation that makes the transactions I have described illegal. Yet it is obviously not being enforced by the ministry.

8:20 p.m.

I am not trying to be provocative. I do not understand why section 60 cannot be enforced with respect to 100 Coe Hill Drive. Do we lack enforcement and penalty provisions in the Condominium Act? If we do, let us put them into the Condominium Act and enforce section 60 to prevent these kinds of scams. We will support the minister on that.

What we are trying to reach towards is a situation where these kinds of ripoffs are clearly illegal, the ministry will have the power to enforce the law, and penalties will be in place against anybody who tries to violate the law.

My problem with Bill 113 is that we are not saying these kinds of transactions are illegal per se. What we are saying is that it is illegal not to provide full and complete information to a prospective buyer with respect to the current state of the law. In other words, Mr. Kowalsky of Lennox Real Estate could not try to sell a recent Polish immigrant an apartment at 100 Coe Hill Drive by giving him the con that he would be able to occupy one of those apartments. That is what we are saying in Bill 113.

We are not saying it is illegal to have this transaction take place. All we are saying is it is illegal if the seller does not provide the purchaser with full and accurate information. With respect, I do not think that is good enough. I really want to understand whether the ministry is trying to outlaw these kinds of transactions, or whether the ministry is simply trying to sanitize these kinds of transactions and say: "If somebody provides full and accurate information to you, a new immigrant, and says the existing Landlord and Tenant Act and other legislation prevent you from having occupancy rights against a tenant who already lives there, do not worry about that. Sooner or later we will get these tenants out of these apartments, and once the apartment is vacant, then you can move in and obtain occupancy. The only thing is you cannot evict the person who lives there now, but if you wait long enough, you will be able to move in there. You may have to wait a year or two, but we will find a way around that. Don't worry about it; buy the deal anyway. It is only going to cost you $20,000 and, sooner or later, you will be able to move into your own little apartment."

It seems to me that there is the loophole. There is the way out of the legislation. There is the escape hatch. It is not necessary to evict a tenant, but if one waits until a tenant moves out in the due course of time, then the prospective purchaser can occupy the unit.

It seems to me that this is a very fundamental problem. I hope the minister is listening and not listening to his --

Hon. Mr. Elgie: We are talking about the same thing the member is talking about.

Mr. McClellan: I know the minister can walk and chew gum at the same time. I am confident.

We have a real problem here because I thought we had agreed in this Legislature around the kinds of terms and conditions for a combination of ownership and occupancy. I thought we had said that if one wants to own and occupy, one does it under the terms of the Condominium Act. I thought we had already agreed to that.

Various ripoff artists have come up with various scams that appear to bypass the terms of the Condominium Act. It seems to me that the solution is not to wipe out the tough provisions under section 60 of the Condominium Act and say, "Oh, well, if you just provide information about the nature of this scam, then the scam becomes legitimized." It seems to me that is what the minister is doing in Bill 113. I do not think that is right. I think we were right in the first instance to say: "Look, if you want ownership plus occupancy rights, you do so under the terms of the Condominium Act. The other kinds of occupancy relationships are under the Corporations Act, the Co-operative Corporations Act or the Landlord and Tenant Act."

Basically, we have three kinds of occupancy relationships. My concern is that the minister is setting up some new fourth category here, so that if somebody like Mr. Kowalsky of Lennox Realty wants to go ahead with the kind of scheme I have described at 100 Coe Hill Drive, all he has to do is say, "Here is the way the law reads at present. You cannot evict the tenant who lives there now, but if you wait long enough you can get occupancy when the tenant moves out." We have a new kind of co-ownership occupancy relationship that is not covered by the Condominium Act or by the Co-operative Corporations Act or by the Landlord and Tenant Act. We have some new hybrid out there.

I really do not see what protection there is for the people who are being victimized by these kinds of scams. The only protection comes if they exercise their right prior to the closure of the sale to protest that they were given false information. If they give evidence prior to the closure of the sale that they were given false information prior to the closure date, then the transaction is voided.

The people I talked to were recent immigrants who did not have the slightest idea they were being ripped off or what was involved in this kind of transaction. I can assure the minister, as surely as I am standing here, Bill 113 will not prevent the same kind of thing as happened at 100 Coe Hill Drive from happening again next month or two or three months from now. All we have to do is arrange a short closing date. The only escape hatch is to have a 20-day closing date.

Unless I fundamentally misunderstand the legislation -- and I hope I do, but I do not think I do -- I read section 2 of the bill as saying it is illegal to sell or offer to sell an interest in a residential complex without providing complete information about the state of the current landlord-tenant relationship. If such a relationship is entered into, the purchaser has the option of voiding the transaction prior to the closure date, after which he can sue.

Thanks a lot. He can sue. So what? He still owns the property. He can sue for damages, but that does not void the sale. It does not void the transaction and it does not make this kind of transaction illegal. I think it is important to establish that such transactions are illegal. They should take place only under the terms of reference of the Condominium Act. If they do not take place under the terms of reference of the Condominium Act, they should not be permitted.

The minister may disagree with me on that, and we can discuss and debate that. I know the minister is sincere in trying to end these kinds of scams; I do not question that for a second. I question whether the legislative remedy in front of us this evening actually does that or whether it will simply permit other loopholes to be opened up and exploited and the process to be continued.

I do not intend to belabour this. We can have some back-and-forth dialogue when we get to committee of the whole. But I want to raise one really bizarre aspect of the 100 Coe Hill Drive episode. I am quoting from a little community newspaper called The Villager, the issue of June 1983. The article is entitled, "Tenants Organizing to Fight Multiple Ownership Threat." This is a description of what happened at 100 Coe Hill Drive.

8:30 p.m.

I will read this to the minister because I really think it is quite bizarre and indicates the seriousness of the problem we are dealing with. It is an article by someone identified as Bill Dunphy.

"Apartments at 80 and 100 Coe Hill Drive, comprising about 140 units, were sold in early May before the amending legislation was passed." Those are the amendments to the Landlord and Tenant Act. "According to the new owner's agent, they had originally intended to try to sell the individual units at prices ranging from" --

Mr. Speaker: Order.

Mr. McClellan: Am I keeping anyone awake here?

Mr. Speaker: Order. Proceed please.

Mr. McClellan: Mr. Speaker, whom do you want to proceed?

Mr. Speaker: Order.

Mr. McClellan: To continue: "According to the new owner's agent, they had originally intended to try to sell the individual units at prices ranging from $26,000 to $39,000 as quasi-condominiums. But after the new laws were passed, they gave up on the idea. Yet they continued to advertise the units for sale and that has worried tenants in those buildings" -- at 80 and 100 Coe Hill Drive.

The units were not offered to the tenants and, in fact, the owners' agent, Mr. Kowalsky of Lennox Real Estate, told us that tenants were not welcome to purchase their own unit shares. "We are only offering the units to Polish, Ukrainian and Czech peoples," Mr. Kowalsky told us. "They get together like friends. They have the same languages, background and history. Now don't get me wrong," he said. "I love everybody. But it would be difficult for someone without the language, say, somebody different who is Jewish."

Mr. Kowalsky continually referred to 549013 Ontario Limited Corporation, which owns the building, as a club. Obviously, there is a restricted covenant involved as well. The tenants appealed to the Toronto Real Estate Board and were told, "It's none of our business."

It is my understanding they have had communication with the ministry. I may be wrong on that, but I understand they have had communication with the ministry with respect to this matter. I would be curious to know what response the ministry has had to that.

Again, this is secondhand information and I do not hold hard and fast to secondhand information. However, it gives us an indication of the seriousness of the problem about which we are talking. We are talking about a very serious ripoff that appears to be in flagrant violation of section 60 of the Condominium Act as it currently stands, which is not, as I understand, being enforced.

Second, we are talking about arrangements that involve some kind of restricted covenant, which the Toronto Real Estate Board simply washes its hands of. "It is none of our business, if somebody is involved in a restricted covenant. Do not tell us about it because we do not want to know."

I am really concerned about what is happening here. I want an assurance from the ministry, which I do not see upon my own reading of Bill 113 or discussion of Bill 113 with a number of people within the tenants' movement. I do not perceive a tough initiative by the ministry to put an end to these kinds of scams.

I am not being dogmatic. I am conceding that perhaps I do not understand what the ministry is about here. I do not make any apologies for confusion. I acknowledge confusion to be a permanent part of the human condition, to which I am particularly susceptible.

However, I need to be convinced in language I can clearly understand and, more important, in language a new Polish immigrant to this country can understand that we are being protected against the kinds of ripoffs invented by ingenious con men who are trying to subvert legislation passed here very recently, specifically section 60 of the Condominium Act. When we passed section 60, we thought we had dealt with these kinds of scams once and for all and that there would be no interests with occupancy rights sold outside of the Condominium Act. We seem to have misunderstood that.

I want to hear from the minister, either now in his response on second reading debate or when we get into a more back-and-forth discussion in clause-by-clause in committee of the whole, what exactly the ministry is intending to do with respect to Bill 113. Let me leave it at that. I invite the minister to try to clear up some of the confusion here. If we cannot do it in response to second reading debate, perhaps we can have some more discussion in committee of the whole House.

Mr. Philip: Mr. Speaker, I would like to speak about this bill from a historical point of view and see where this legislation comes from. It is really a history of bumbling, not so much of this ministry, but of another ministry. I am glad to see the parliamentary assistant to the Minister of Municipal Affairs and Housing is here because it is the bumbling of the Ministry of Municipal Affairs and Housing that this ministry is trying to correct.

What we have is a series of one example after another, dating back to 1976 with the first attempt in Scarborough to sell a percentage interest in a building with an allocation of an apartment. At that time, the Von Teichmans of this world found a way of getting around the condominium conversion bylaws. It was virtually impossible to convert a rental building to condominiums because, luckily, under the Planning Act there were provisions whereby municipalities could set certain guidelines. It virtually dried up taking that route.

Wolf Von Teichman and others of his ilk decided there was a way of merchandising the technique to develop a new kind of housing, a kind of housing that was not co-op, that was not rental and that was not condominium, and to take buildings that were old and obsolete, convert them, sell them to unsuspecting purchasers, merchandise them and inflict on poor people, as purchasers, the same kind of thing that would happen to them as tenants. We had a situation in Scarborough, Rexdale and Mississauga. There were poor people who were taken on this scheme trying to evict other poor people who wanted to hold on to their apartments.

At the time, the parliamentary assistant to the Minister of Consumer and Commercial Relations suddenly woke up to the fact that it was happening in his own riding and the Minister of Consumer and Commercial Relations had the Condominium Act before him. He had considerable pressure from the condominium world, saying: "Look, these people are merchandising things they are saying are like condominiums and they are not condominiums. They are going to give a bad name to the rest of us and people are going to be taken on it." Section 60 -- at that time I believe it was section 59 -- of the Condominium Act was brought in.

At that time, I rose in the Legislature and said to the then minister, now the Treasurer (Mr. Grossman), "We are going to have problems with this. What we have is a group of purchasers who are going to be minority interest holders in a building with no kind of control over the major interest holder who is going to be the principal landlord." The minister said, "Oh, no, we have to plug the loophole."

We moved an amendment to stop it once and for all, but at least to grandfather in, with certain kinds of protections for the tenants, those buildings that were already started. That amendment was voted down by the Liberals and Conservatives.

8:40 p.m.

We now have as part of the rationale the minister is giving us that this not only protects new buyers, but it will also protect some of the minority interest holders at places such as 41 Garfella and some of the other buildings. Of course, there are other ways of protecting them. He knows it; he knows there are ways of protecting them under the Planning Act but unfortunately he is not the Minister of Municipal Affairs and Housing.

Unfortunately, the dinosaur who is the Minister of Municipal Affairs and Housing (Mr. Bennett) and his parliamentary assistant, the member for Wilson Heights (Mr. Rotenberg), who is even more reactionary, do not want to touch it. They do not want to bring in the appropriate amendment to the Planning Act that would give to municipalities the same right they have over conversion of condominiums, the right to go and look at the proposed change and to say either yes or no -- yes, it is in the best interests of the community or no, it is not.

At the time section 60 went into the Condominium Act, I predicted we would have the minority interest holders in a situation where they could not get a mortgage renewal. That is what we have in a building such as 41 Garfella. The original owner, who owns the third mortgage, is not renewing it. By the way, I appreciate the fact that the minister intervened when I approached him, and I understand there is some kind of stay or whatever.

We are faced with a situation where we have a legitimately conscientious minister trying to do the work of another minister. I sympathize with him. He knows there is a tough problem, and he only has a tiny piece of the action. Even though he does not have the best tools possible, he has to do the work of another minister because another minister is unwilling or incapable of doing his job.

Mr. Rotenberg: That is nonsense, and you know it.

Mr. Martel: Sure it is. You will not build houses.

Mr. Speaker: Order.

Mr. Martel: We are sick and tired of his interjections.

Mr. Philip: The parliamentary assistant deserves to be insulted.

An hon. member: Don't you usually name members who interject, Mr. Speaker?

Mr. Martel: You usually say to me to be quiet.

Interjections.

Mr. Speaker: Order.

Mr. Philip: I have obviously provoked the parliamentary assistant to the Minister of Municipal Affairs and Housing, the man who is against Bill Pr13, requested by the city of Toronto, the bill that would have stopped little old ladies and little old men from being thrown out on the streets by unscrupulous developers who want to plough under their buildings. It is the same principle as conversion. In this case we are dealing with conversion by a technique of getting around condominium planning bylaws. In the case of the bill he would not support, the one in his own riding --

Mr. Rotenberg: It is not in my riding, and you know it.

Mr. Philip: It is a different type of conversion -- conversion by demolition. He is responsible for those people being thrown out on to the street --

Mr. Rotenberg: That is nonsense.

Mr. Philip: -- and I can see that I have his attention. I can see I have pricked his conscience.

Mr. Rotenberg: On a point of privilege, Mr. Speaker: The member for Etobicoke (Mr. Philip) -- and I want to choose my words carefully -- consistently, deliberately and maliciously does not make statements in accordance with the facts about Bill Pr13, about myself, about my riding or about Eglinton Avenue. I ask you to correct the record to indicate that his statements are not in accordance with the facts and that he is doing it deliberately and maliciously.

Mr. McClellan: Mr. Speaker, on a point of order: You cannot allow the member to accuse my colleague of making malicious and misleading statements. You have your duty; perform it.

The Deputy Speaker: Order. A point of privilege takes precedence over a point of order. The member has made his arguments concerning his point of privilege. I think as we were having a transition in the chair the Speaker made very clear the point that there were interjections that were provoking the speaker. The point was made that the member for Etobicoke has the floor. We have made due note of the comments of the member for Wilson Heights as his point of privilege.

The member for Bellwoods (Mr. McClellan) was on his feet with a point of --

Mr. McClellan: Of privilege. The remarks of the member for Wilson Heights were clearly in violation of the standing orders. I ask you to instruct him to withdraw them.

The Deputy Speaker: On the point of privilege raised by the member for Bellwoods, I did not notice anything that the member would be required to withdraw. I remind the member to avoid the interjections that provoke the comments that are destroying the decorum of the House. The member for Etobicoke has the floor.

Does the member for High Park-Swansea have a point of order?

Mr. Shymko: Yes, Mr. Speaker. Just so there is no misinformation, the member for High Park-Swansea is the sponsor of Bill Pr13 on this side of the House.

The Deputy Speaker: That is duly noted. The point of order is well taken.

Mr. Philip: On the previous point of order, Mr. Speaker: The member for St. George (Ms. Fish) originally sponsored the bill. She did not even vote for it. She was embarrassed by it. The government delayed it, and the government has done the same thing with this one.

Mr. Shymko: I am not embarrassed.

Mr. Philip: He is embarrassed.

The Deputy Speaker: The point of order is turning into a debate. Would the member for Etobicoke kindly return to the principle of the bill and proceed with the debate?

Mr. McClellan: I assume "malicious distortion" is now parliamentary language. It is a two-way street. That is fine.

The Deputy Speaker: Order. The member for Etobicoke will continue.

Mr. Philip: I am not in the least provoked by the demolition member for Wilson Heights. He is the member who is responsible for the demolition of legitimate housing in his riding, and his constituents know that. I have been to meetings where he has not had the guts to show up in his own riding to debate the issue.

Mr. Rotenberg: Name one.

Mr. Philip: The member was not even there to debate the issue. The Attorney General did not show up.

The Deputy Speaker: I remind the member for Etobicoke that it would assist the debate if he could avoid inflammatory comments about another member. Let us remember decorum.

Mr. Rotenberg: On a point of privilege, Mr. Speaker: The member for Etobicoke has indicated something happened in my riding at a meeting I did not attend. I suggest to him it did not happen in my riding, and I do attend the meetings in my riding. I challenge him to point out a meeting in my riding I was invited to and did not attend.

Mr. Cooke: He didn't say "one." He said "several."

Mr. Wildman: That is malicious distortion.

The Deputy Speaker: Order.

Mr. Martel: Mr. Speaker, I have listened to you getting up and giving us a little lecture about my colleague using inflammatory remarks. You allow the member for Wilson Heights to use a term like "malicious distortion," and then you have the audacity to lecture my colleague who is being interrupted constantly by that bird --

An. hon. member: He's a blue jay.

Mr. Martel: Yes. He might even be a cardinal.

Mr. Speaker, you just cannot play it that way. About a week ago tonight you played the same game with the member for Cochrane North (Mr. Piché), whom you allowed to jump all over the speaker. Either get some consistency in here, stop chastising us and get that guy to be quiet, or you will have chaos all night.

The Deputy Speaker: I say to the member for Sudbury East (Mr. Martel), we do not need threats to the chair. We are just here to provide some decorum --

Mr. Martel: Well, I am sorry. It is you who is doing the lecturing.

The Deputy Speaker: Order. You have made your comments.

Mr. McClellan: Are you going to throw us out because he accuses us of malicious distortion?

The Deputy Speaker: I agree that words such as "malicious" are not appropriate to the debate.

Mr. Martel: You did not make him withdraw.

The Deputy Speaker: Order. Also, I was not lecturing; I was reminding the members. I merely preside here to remind the member, and all members evenly, that comments accusing another member of failing to have intestinal fortitude, or whatever words were used, are not appropriate.

Mr. Martel: Did you make him withdraw? No, you did not.

The Deputy Speaker: If we are asking this member to withdraw, then that member should clearly withdraw, because neither of them is parliamentary.

The member for Etobicoke has the floor.

Mr. McClellan: On a point of privilege, Mr. Speaker: I simply want to understand from you whether the use of the expression "malicious distortion" is parliamentary. If it is not, you will ask the member for Wilson Heights to withdraw the remark. If it is, then we will use it with impunity.

Mr. Rotenberg: Mr. Speaker, the member --

The Deputy Speaker: Would the member for Wilson Heights resume his seat for a moment?

Lest it be interpreted that the member was imputing the word "malicious" to the member for Etobicoke, would he kindly withdraw the remark? I would also ask the member for Etobicoke to remove the allegation that the other member lacks intestinal fortitude.

Mr. Breaugh: No, he said "guts."

The Deputy Speaker: I understand what he said, but I put it in other words.

8:50 p.m.

Mr. Rotenberg: Mr. Speaker, in order to possibly calm the proceedings, I would like to indicate that I did not use the word "distortion," because I know that is unparliamentary. What I said was that the statements of the member were not in accordance with the facts. I think that is parliamentary. However, I did say he did that "maliciously," and that I will withdraw.

The Deputy Speaker: We thank the member for withdrawing "malicious."

Mr. Philip: I withdraw whatever I said that upset you, Mr. Speaker. Also, I admit that I was unfair to the member for Wilson Heights, because he was not the only one who did not have the guts -- sorry; I withdraw the word "guts" -- the intestinal fortitude to show up at the tenants' meetings. The Attorney General also did not have the guts- -- the intestinal fortitude, I mean -- to show up at the meetings of the tenants whose buildings were being demolished. It is essentially the same principle.

Indeed, when we come to this bill, the major problems are in the area of south Etobicoke. In fairness to the member for Wilson Heights -- because I would not want him to think he is the only one who was afraid and did not show up for a debate -- the member for Lakeshore (Mr. Kolyn), when invited by the Lakeshore Tenants' Association to debate with me on tenants' issues, of which this one was, suddenly had a problem with his foot. He had his foot in a cast and could not show up for the public debate.

Mr. Rotenberg: On a point of privilege, Mr. Speaker --

Mr. Philip: Well, Mr. Speaker --

The Deputy Speaker: Order. The member for Etobicoke will please resume his seat.

Mr. Rotenberg: Mr. Speaker, I am trying to restrain myself. When the member for Etobicoke says I was afraid to show up, that is imputing motives. I would ask him to withdraw, especially since the meeting he refers to was not in my riding and had nothing to do with my riding.

Mr. Philip: Mr. Speaker --

The Deputy Speaker: One moment, the member for Etobicoke. The member for Wilson Heights need not interject and perhaps be as sensitive as he is about allegations which we all know come into a debate of this nature. Task the member for Etobicoke to be more responsible. Let us get back to the principle of the bill rather than dealing with the personalities and suggesting allegations to any honourable member of this House.

Mr. Philip: Mr. Speaker, I was talking on the principle of the bill, the principle being that we had an opportunity to look at the major problems that were affecting tenants. The greatest number of buildings that are affected happen to be in the Lakeshore area. The tenants' association invited the member for Lakeshore and myself to look at this. That debate would have proved inspiring to the Minister of Consumer and Commercial Relations (Mr. Elgie). The outcome of that was going to be televised by Maclean-Hunter. He could have watched it and he could have seen what the member for Lakeshore had to say about it, but the member for Lakeshore went out and broke a leg.

The member for Lakeshore with that broken leg could attend receptions. He could walk up and down stairs. I saw him at the city of Etobicoke receptions. He was able to lift his glass of wine. His foot did not affect him there. He was able to talk at the receptions. But when it came to meeting with the tenants in his own riding, he could not accept the invitation.

That is unfortunate because, I am sure, the debate between the member for Lakeshore and myself -- which would have been televised -- would have been first-class information for the Minister of Consumer and Commercial Relations before he brought in this bill. That is why I am talking directly on the bill.

The major number of buildings that have this kind of conversion are in the Lakeshore area. There are ways of dealing with this problem that we have also provided. We have suggested to the ministry that the buildings that are already partially converted where there were minority interest holders, with the proper funding by the provincial government, could have been turned into legitimate co-operative apartments.

In the case of the Irwin-Arcott-Tandridge projects, with the co-operation of the municipality and a number of politicians, myself included, who worked together on doing that, we ended up with a legitimate co-operative apartment building in which the tenants had rights and in which the original investors got all their money back.

These were some of the options open to this government, but the government chose none of them. Then we thought at least the tenants were protected legally. That was the opinion of the Attorney General. When I rose in the House and asked the Attorney General, "Can a minority interest holder in a building evict a tenant?" the Attorney General said, "No, they are protected under the Landlord and Tenant Act because the interest holder is not an owner."

Of course, the case of Medeiros versus Fraleigh threw that aside, so I introduced a private member's bill, which was copied word for word by the Attorney General. When I had to correct essays in university classes, if a fellow did not have a footnote or if he had copied a whole essay, he got an F; it was called plagiarism. Here it is called some kind of innovation. The Attorney General copied my bill word for word, introduced it in the Legislature and said everybody was protected.

The Minister of Consumer and Commercial Relations, who I think is a lot smarter than the Attorney General, said: "Wait a minute. They are not all protected. We are going to change some rules in the Securities Act." The Ontario Securities Commission is the only agency in that whole ministry that seems to know what it is doing. It is the only regulatory body that does not seem to have one accident after another. The minister brought in regulations to try to protect the consumer under the Securities Act.

Interjection.

Mr. Philip: I am just starting.

However, that did not work because it was too cumbersome, and we still have the problem of the Medeiros case.

What happened then? The Minister of Consumer and Commercial Relations recognized that he was not going to persuade that dinosaur colleague of his, the Minister of Municipal Affairs and Housing, to act. He recognized that he had got to do something, so he brought in this bill.

It might be argued -- and the minister will argue -- that this in some way makes it a little less attractive to merchandise. That would be fine, except that he and I both know that the people who are purchasing these often are not sophisticated; often they are people who are new to the country. There is very little control over what is said orally, although now he will have some control over what is in print and what is advertised.

There is not one iota of a guarantee in this bill that this process of merchandising buildings, of selling them off by a percentage interest, will be stopped in any way; it may be discouraged, and this bill may help to discourage it in some way. But if the Minister of Municipal Affairs and Housing is not going to do his job, surely what we need is an amendment to this bill that will at least give municipalities a review over any kind of conversion. That is the basic right that is guaranteed to them under the Planning Act in relation to conversion to condominiums, and one must ask why this government is so resistant to giving municipalities the same kind of influence over this kind of conversion.

It is not bad enough that we have had six years of attempt after attempt to plug this, that the government has tried to do it through the Ministry of Consumer and Commercial Relations -- the wrong vehicle to do it -- and has been abominably unsuccessful. It is not bad enough that the Attorney General assures us that tenants have certain protections that they do not have and then has to bring in legislation to give them those protections.

9 p.m.

It is not bad enough that we have case after case of senior citizens being harassed and told they have to lease their units. Even though the landlord or the owner does not now have the legal right to do it, we know of case after case where this is happening, where people get tired of being rung up at night and told: "You have my apartment. Will you please leave? I'll give you $100 to leave. I'll give you $1,000 to leave." Eventually they do leave.

This bill still does not deal with the depletion of rental stock in a community, and that is the essential reason that even though we may empathize in principle with what the minister is trying to do, even though we know that he has his heart in the right place while so many others in his cabinet are overruling him and going against him, we understand that. But it does not deal with the essential question. As though it were not bad enough that there are conflicts within the cabinet on this, there are also conflicts within his own ministry.

Mr. Speaker, you would be surprised. Do you know this minister is saying one of the reasons he can do this is that the people are protected from the Medeiros-Fraleigh case by the legislation which the Attorney General borrowed from me -- and therefore the tenants are protected and now he is going to protect the consumers. The basic principle that is now protected is that the people who own these are shareholders and are not the owners of units. That is the principle of this bill, that they have to he told this.

Having said that so many times in the House and bringing in this legislation, what do you think his Residential Tenancy Commission is doing at this moment? They are sending out a memorandum. They are sending out a memorandum that in the case of a building on Allenhurst, for example, which has 59 units, we could end up with 58 rent review cases because the Residential Tenancy Commission is looking at each of these shareholders as landlords and, in fact, says you can have individual rent review cases for each of the units.

So not only do we have one ministry not knowing what the other ministry is doing, not only do we have this ministry trying to correct the problems and lack of activity by another ministry, and the Ministry of Municipal Affairs and Housing should be acting, but within his own ministry the left hand does not know what the right hand is doing. I know the minister is the left hand, but unfortunately, in this case the right hand is the Residential Tenancy Commission undermining the very principle of the bill that he is bringing in.

I commend the minister. He is trying to do his best. He is, unfortunately, not the Minister of Municipal Affairs and Housing. I wish that the government would make him Minister of Municipal Affairs and Housing. He would not have to bring in this bill and he would enact the appropriate legislation. The Minister of Municipal Affairs and Housing, for the philosophical reason that he is so constipated in his ideology, will not bring in the proper amendments to the Planning Act and clean this up once and for all.

So I have to say to the minister, a good try, but it is not good enough. He has got to go back to cabinet and he has to say to the Premier (Mr. Davis): "For heaven's sake, don't have me do the job of another minister. Don't have me do the job that the Minister of Municipal Affairs and Housing is failing to do."

We will be having some amendments to the bill. I hope that the minister, after all of the friendly things that I have said about him, will enthusiastically look at our amendments. Unfortunately, this basically is a testimony to the failure, not so much of his ministry but the failure of this government, to deal with this problem.

I am reluctant that I cannot support the bill even though it will do something, but very little.

Hon. Mr. Elgie: Mr. Speaker, with a great deal of humility and fear I enter into this debate.

May I thank the member for Prescott-Russell (Mr. Boudria). I think we have an understanding. The amendment that I am introducing is in line with the previous bill and the landlord and tenant amendment will replace the mobile homes.

I think one of the first things we have to understand is that tenancy in common and corporate ownership of buildings are long-standing principles which, as the member said, we do not intend to interfere with. This legislation is basically a case for the Consumer Protection Act, consumer protection type of legislation which simply says it is an offence to sell a building to tenants in common if one has led them to believe that they will also take possession of a unit and have a right to own and occupy it. It is illegal to do it.

It is not saying that one then has the right to do other things. It is simply saying that if one wants to sell a building the way we all have for hundreds of years, as tenants in common or whatever other way, one can do it but one must not deceive people. That is all it is.

It is not intended to be anything else and it is not an issue, in my view, that is circumventing municipal bylaws at all. It is simply a matter of its proclaiming that one may continue to sell buildings in the way one has for years, but one cannot deceive the purchasers into thinking they own a chunk of the action and can evict tenants.

Certainly we know that the Attorney General, who had given this House the long-standing view with respect to the Landlord and Tenant Act but it was overturned in the Medeiros case, quickly corrected that deficiency. I look on this bill now as a companion piece of legislation to that.

I would like to explain to the member for Bellwoods that my understanding has been confirmed with the staff who are here, Ralph Lewis and Bob Simpson, whom the member knows. Basically section 60 is now a big loophole.

For example, in the building that the member was referring to on Coe Hill Drive, it is an example of how that loophole was used. It is my understanding there was only one deed to all the co-tenants and the vendor did not retain an interest in the building and therefore section 60 did not apply. In order for section 60 to apply, an owner has to retain an interest in the building and sell off part or all of it but still retain an interest in it. That is what that section is.

The section stopped a lot of transactions for about a year and a half or so and then people understood that as long as they transferred it, if they held up a lot of options, got options on all sorts of portions of the building and then registered and sold it all at one time, the act did not apply.

What we are saying is that this legislation specifically spells out that it is against the law to tell people that by buying a building as a tenant in common they also acquire the right to occupy a unit and dispossess a tenant of his rights. One cannot do it. If one does deceive somebody in that way and it is before the deal has been finalized, the deal is voidable. If it is after the deal, then one can sue for damages, recovering costs for any inconvenience and for loss of whatever, even for alternative living expenses. In addition, there is a charge to be laid and the details of the type of charge are outlined in the bill.

I have to say that from the point of view of a consumer ministry protecting consumers from misrepresentation, that is what this bill is about. Our staff and I think that this kind of proposal cuts out all the nonsense and imposes civil remedies and penalties on those who choose not to abide by its terms. I would ask all members to support the bill.

The Deputy Speaker: Hon. Mr. Elgie has moved second reading of Bill 113, An Act to regulate Conveyances of Dwelling Units in Residential Complexes.

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion the ayes have it.

Bill ordered for committee of the whole House.

9:10 p.m.

House in committee of the whole.

RESIDENTIAL COMPLEX SALES REPRESENTATION ACT

Consideration of Bill 113, An Act to regulate Conveyances of Dwelling Units in Residential Complexes.

On section 1:

Mr. Chairman: Hon. Mr. Elgie moves that clause 1(e) of the bill be amended by adding to the end thereof "and a mobile home park as defined in part IV of the Landlord and Tenant Act."

Mr. Boudria: Mr. Chairman, I would like to speak briefly in favour of the amendment. I thank the minister for bringing forward the amendment, which he and I have discussed previously. The thrust is to provide better protection for mobile home park residents. I would like to take a moment or two to describe a situation in my constituency.

There is a mobile home park in Orleans, known as the Bellevue Mobile Home Park. It is owned by a few individuals -- one of them is Brian Cameron, the Conservative candidate in Ottawa Centre in the 1977 provincial election; the other individual is a fellow by the name of Sal Kahn.

Mr. McClellan: "Con" as in "con man"?

Mr. Boudria: It is not spelled that way. I will leave it at that and let the member for Bellwoods make his own judgement, once I have explained the situation, as to whether that description of the individual is adequate.

There has been an almost continual problem in Bellevue Mobile Home Park for a number of years, with various tenants being shortchanged, I will say, without trying to use more colourful words, by their landlord. They are just totally deprived of any kind of decency in services. They go for days without water, with a defective sewage system and a whole assortment of just about everything that can go wrong in a landlord-tenant situation.

The residents of that park have complained to my office on many occasions and with very good reason. Last year they had their water disconnected, I would say deliberately, by the owner for a number of days. Subsequently, under an arrangement I made with the regional municipality of Ottawa-Carleton, the tenants of that park plugged the water system into the fire hydrants of the regional municipality to obtain water, an arrangement that lasted a number of days until it was discontinued.

The owners of this park decided lately they were going to sell this mobile home park. Let me describe the mechanism by which they would sell. First of all, they went to the township and said, "We want to sever all this in lots." They got laughed right out of the place, of course, because they were not providing any services. The place was just a shambles and they just wanted to unload the mess on the municipality, which would then have to build the roads, sewers and everything else the place should have with the huge rents they are charging.

In any case, this not being possible, these individuals decided they would sell shares in the park to people who wanted them. Those people who wanted the shares would have the privilege of putting a home on one of these lots. What they were doing was exactly the same thing the minister is trying to prevent. It is very interesting that this has happened at this time.

When they erected a sign that said, "Lots for Sale," I was very concerned. First of all, they did not have any lots; so they could not possibly sell them. In fact, what they were doing was selling shares in a company. They handed out a little document to potential buyers, telling the people: "It is going to cost this much to fix the sewers, this much to do this and this much to do that. You are going to finance this, once you have bought your individual lot. That will cost you so much a month, the maintenance is going to be so much, and that is your total cost."

I had a look at one of these documents and became very concerned. As far as I was concerned, that thing was a prospectus. I phoned the Ontario Securities Commission and I described what I had seen to the ministry person, Mr. Leybourne. Needless to say, he was not too pleased. In this instance he managed to get them stopped. He promptly telephoned them and told them to cease what they were doing immediately and threatened them with issuing a cease-trading order. That night, when I flew back to Ottawa and then drove back to my riding, I drove in front of the park and they had put a large piece of cardboard over the "Lots for Sale" sign.

Needless to say, this official was quite quick in that instance in telling them to cease what it was they were doing. They did cease voluntarily at that point. So we never did get to find out whether they could have got away with whatever it was they were doing. They did volunteer to quit the sale operation that they were referring to, recognizing of course that they were not really selling the lot but were merely selling a share of the ownership in the facility.

We managed to stop it that time. Had they not stopped of their own accord, there would have probably been a requirement to have Bill 113 with its amendment to ensure that those people would be covered. Obviously, this is not the first time this happened. If it has happened in this park, I am sure it has happened elsewhere. If it has not happened elsewhere, I am sure it would have, without having this bill and this amendment.

Again, I would like to thank the minister for bringing the amendment forward. I am sure the residents of Bellevue Mobile Home Park and all other residents of mobile home parks will be appreciative.

In closing, I think it is important to understand the plight of the people living in those parks. The expense they have to go through in order to relocate is very large. To move a mobile home costs in excess of $1,000. The other important feature is the fact that the present Landlord and Tenant Act does not afford a protection of any longer than 120 days for residents of that park in the event of a closure or in the event that the owner of a lot wants to use it for himself. In other words, residents are quite vulnerable to being relocated on a 120-day-notice type of affair.

I am sure the minister and everyone else will recognize that it is very difficult to move a mobile home in the winter or spring months, in the spring thaw and everything else. Anything we can do to protect them is certainly going to be very helpful.

We should do much more to protect residents of mobile home parks but this is one small step. I hope we can keep those mobile home residents in mind whenever we deal with landlord and tenant situations or whenever we deal with housing situations.

I am sure the Minister of Municipal Affairs and Housing is listening attentively to this to pay close attention to the plight of mobile home parks. If we do that and try to provide better quality legislation for the protection of these people, it will be better for all of us. Of course, there is nothing wrong with mobile homes per se; what is wrong really, in my view, is the fact that legislation does not protect them nearly as much as it should.

Mr. McClellan: Mr Chairman, we will support the amendment to clause 1(e) adding mobile home parks. After all the words that have been spent and all the ink that has been used in printing about mobile home parks, I do not understand how the minister could bring in legislation that would ignore mobile home parks in 1983. What a terrible oversight; I am shocked.

9:20 p.m.

It does not deal with the principal concerns I have as to whether or not Bill 113 addresses the issue adequately. I have to tell the minister, reluctantly and with tears in my eyes, that he has failed to convince me. But we can discuss that when we get to section 2.

In the meantime, we are amazed that the ministry has once again, for the umpteenth time, ignored, neglected and omitted mobile home parks. We hope this is the last time we have tenant protection legislation that forgets about mobile home parks. Does the minister not have any northern members, eastern member or western Ontario members?

Hon. Mr. Elgie: Lots of them.

Mr. McClellan: How come they never tell him about mobile home parks? Are they deaf and dumb? I am at a loss.

Hon. Mr. Elgie: He has got the only one with the problem.

Mr. McClellan: I am amazed.

Motion agreed to.

Section 1, as amended, agreed to.

On section 2:

Mr. McClellan: Mr. Chairman, I do not have any amendment to section 2, but I want to raise a couple of questions about what is happening in section 2.

May I simply ask the minister why is he allowing any form of occupancy agreement outside the purview of the Condominium Act. What he is saying is that an occupancy agreement will, in effect, be valid under certain conditions outside the purview of the Condominium Act.

Mr. Rotenberg: No, it is not.

Mr. McClellan: An occupancy agreement will be valid under Bill 113. This is the nub of my concern. The minister is saying a new kind of occupancy agreement is permitted. First, it is permitted if the vendor provides full information with respect to the state of existing landlord-tenant law, if he tells the purchaser exactly what the state of the law is and provides full and accurate information. Second, if the purchaser does not exercise his option under section 4 to void the transaction or to sue, then he is saying, "Okay, we have a new kind of occupancy agreement."

The minister is not making the kinds of occupancy agreements that are described in this bill illegal; he is not saying they are illegal and that they cannot take place. He is simply saying there are certain terms and conditions that have to be fulfilled: first, full disclosure of accurate information to the purchaser, and second, time for an opportunity to exercise the purchaser's discretion to void the transaction.

Let us assume that both these conditions are fulfilled. Mr. Kowalsky at Lennox Realty tells the Polish immigrant, who has just arrived in Canada: "These are the terms and conditions of our laws for the time being. If you purchase this apartment under this arrangement with this occupancy agreement, you cannot evict somebody who lives in apartment 105 at the present time. I am telling you this. You cannot evict the tenant because he is protected under the Landlord and Tenant Act, but when the tenant moves out, that is another story."

So the guy buys the apartment on speculation against the time when the existing tenant will move out. There is a de facto occupancy agreement built into the arrangement. We are talking about a new kind of occupancy arrangement, as I understand it. We are not talking about an occupancy agreement under the terms of the Condominium Act. We are talking about some new category of occupancy agreement which follows upon the conditions that are set out in sections 2 and 4 of Bill 113. Assuming that section 2 and section 4 provisions are complied with, then I am quite convinced it is possible for a new kind of occupancy arrangement under tenancy in common to be entered into.

I may be stupid, but I thought we had said occupancy agreements will take place within the purview of the Condominium Act, the Co-operative Corporations Act or the Landlord and Tenant Act.

Mr. Rotenberg: Section 21(a).

Mr. McClellan: Why does the member for Wilson Heights (Mr. Rotenberg) not keep quiet? If he wants to get up and speak, let him speak. I am getting sick and tired of this kind of interjection from this member.

Mr. Chairman: Order. Carry on.

Mr. McClellan: I am talking to the minister. We have understood there are three kinds of occupancy agreements in this province that are legitimate, those under the Condominium Act, the Co-operative Corporations Act and the Landlord and Tenant Act. Fill me in if I am wrong. I do not think I am wrong. I think those are the three legitimate forms of occupancy relationship.

My concern is that I see a fourth form of occupancy relationship or occupancy agreement under this statute. I am quite convinced I am correct. I have consulted with people in the community and the tenant movement, and they agree there is a problem here. We are dealing with loopholes, I understand that, but we are dealing with loopholes under section 60 of the Condominium Act that sharpies have managed to discover and exploit. This is the problem we are trying to confront.

I do not think the minister has solved the problem, with respect, by the provisions of Bill 113. The minister has simply sanitized the loophole. He has said, "We have a loophole here and we have to clean it up, so we will go the traditional route of consumer protection, which is the provision of full and accurate information." The guy provides full and accurate information. So what? The loophole is still there. It seems to me that the minister has to go back to section 60.

I do not pretend to have the expertise to come up with the legal language to close the loophole, but it seems to me the minister was more on the right track with section 60 of the Condominium Act than he is with Bill 113. He is, in effect, setting up a fourth category of occupancy agreement under this bill now, not under the Condominium Act, not under the Co-operative Corporations Act and not under the Landlord and Tenant Act, but under Bill 113, An Act to regulate Conveyances of Dwelling Units in Residential Complexes.

If a guy provides the information and gets through the waiver period, all he faces is perhaps potentially some kind of lawsuit. But the transaction is valid, the purchaser is stuck with the deal, and there is a new kind of occupancy arrangement that is not given the protection of the Condominium Act, the Co-Operative Corporations Act or the Landlord and Tenant Act.

Again, I yearn to be convinced that I am wrong. At this point, I do not understand how I am wrong. The minister has to convince me.

Mr. Cassidy: Mr. Chairman, I have an amendment to move, but if the minister is replying to the member for Bellwoods, I will wait. I just do not want to go off section 2.

Mr. Chairman: No, we are not leaving section 2. The table has an indication the member has an amendment.

9:30 p.m.

Mr. Cassidy: Mr. Chairman, could the minister respond to the question?

Hon. Mr. Elgie: Mr, Chairman, I would say to the member for Bellwoods there are some fundamental problems he has with this bill, not because of this bill but because he would like to see it dealt with another way. I understand that. In spite of the views he has about whether or not people in today's society should own property, the principle of tenancy in common goes back for centuries. It is not a new principle.

The new principle that came up to try to get around some of the regulations and laws existing in Ontario was the co-tenancy agreement -- a right to own and occupy and evict any existing tenant. That was a problem. The people who are now having problems are in difficulty not because they are owners or tenants in common but because they are owners or tenants in common who were led to believe they could evict a tenant and take possession and control of the unit as their own unit. The ads were very clearly saying, "Buy your own apartment or condominium." That is what the problem was.

There is absolutely nothing wrong in my view, barring a desire by some to change planning legislation with respect to this type of ownership, and I do not sense any desire to do that. It is an age-old concept. Barring that, if a group of people owns a building together and it contains an empty unit, and the group sits down and says, "Well, one of us would like to live in it," that is not the scam or the situation we are trying to address in this bill.

What we are trying to address in this bill is the terrible situation that some people have found themselves in after having bought a building as tenants in common under the representation they own and can occupy a unit and evict anyone who is in it. That is what this bill addresses.

Mr. McClellan: Just so I understand the minister, is he allowing a form of occupancy agreement which is outside the purview of the Condominium Act?

Hon. Mr. Elgie: We are not creating a new type of ownership of buildings. We are saying the centuries-old concept of tenancy in common is preserved -- because we have no intention of doing away with it -- but if one is going to sell one's interest in the building to a group of people, one cannot deceive them into thinking they have a right to evict people and take possession and control of that unit.

If three or four families own a building together and a unit is vacant, there is no reason in the world they cannot agree on which one of the group might live there, but in living there the person would not acquire ownership of that portion of the building.

Mr. McClellan: The minister is then saying it is legitimate to have forms of co-ownership that are outside the terms of reference of the Condominium Act, the Co-operative Corporations Act or the Landlord and Tenant Act?

Hon. Mr. Elgie: With the greatest of respect, we can play back and forth as often as we want; the member's tune will be the same as my tune will be the same. This law prohibits deceiving people into thinking that by signing a co-tenancy agreement they are buying a building in which, as individual owners, they have rights to units and can evict tenants to do it.

I am not talking about people who buy an empty building and agree among themselves who will live in it. We are talking about protecting the rights of tenants, confirming the legislation my colleague the Attorney General brought in. We are preventing people from being deceived into thinking they have the right to evict people from their homes and to acquire that piece of the building as theirs. We are not giving them the right to occupy and dispossess others of it.

Mr. McClellan: I agree with the minister, not to belabour the point, but I feel very deeply he is not eliminating the kinds of scams he is obviously trying to eliminate. It will be possible for people like Kowalsky and Lennox Real Estate to continue the kind of scam they have been engaged in.

Mr. Shymko: No, not as easily.

Mr. McClellan: The minister shakes his head. I am simply speculating. I may be wrong. I hope I am, too, but I do not see how I am. This is my problem. I do not see where the legislation is to protect the men and women who have been ripped off by Lennox Realty. All they have to do is vary the scam slightly and say, "You cannot evict the tenant who lives there now, but when the tenant moves out you can move in."

We are talking about an occupancy agreement with respect to specific units which is not covered by protective legislation. It is not covered by the Condominium Act, by the Co-operative Corporations Act or the Landlord and Tenant Act.

Mr. Philip: It is not covered by the Planning Act.

Mr. McClellan: My colleague the member for Etobicoke says it is not covered by the Planning Act. More important, those three pieces of legislation do not protect the consumer with respect to these kinds of purchases.

I am loathe to make predictions, but this is one I will make. We are going to be back here in a year or two looking at the latest variation on the age-old scam. It is all very well for the minister to talk about the age-old tradition of tenancy in common. It is like talking about the age-old tradition of landlord and tenant, which was a kind of medieval master-servant relationship until we modernized the legislation in the middle 1970s. I do not care how old the stuff is.

So it is feudal; that is wonderful. I thank the minister very much. We will tug our forelocks and thank him for the courtesy of providing us with yet another piece of feudal legislation. Either the minister will modernize it or he will not. By modernizing it, that means he will bring specific legislation forward that provides specific protection.

My concern is that I do not know where these protections are in these kinds of situations. I know where the protections are under the Condominium Act, I know where the protections are under the Co-operative Corporations Act and I know where the protections are under the Landlord and Tenant Act. This is a new category: I am telling the minister that. It is a new category that is being created tonight. There are no protections. Sooner or later the minister is going to have to confront that.

I do not care what his staff tells him. His staff has a genius for being infatuated by medieval legislation. I cannot help that. They are very nice people. I know his staff and I like his staff, but they are medievalists. I know; I was educated by medievalists.

Hon. Mr. Elgie: They are traditionalists.

Mr. McClellan: Traditionalists or medievalists, what is the difference? I received the finest medieval education money could buy. I know what I am talking about. The minister has a real problem here and we are going to be back some time in the future trying to adjust ourselves to the latest scam. I am telling him that.

Mr. Nixon: Did they teach you oratorical gestures?

Mr. McClellan: Modelled after a bird in flight. But a word to the wise is sufficient. If the minister does not want to accept our advice, he will not accept it.

Mr. Rotenberg: Mr. Chairman, because I have had a similar problem to that of the members opposite with people living in my riding who have been involved in a scam, I am concerned with this legislation. When I read it, I was satisfied the legislation does plug the loophole.

Now that the member for Bellwoods has raised the point, I would like to indicate how I read the bill and see if the minister or his staff would confirm my reading of the bill. If the member for Bellwoods is correct, then maybe there is some problem with the bill.

Subsection 2(1) says: "No person shall sell or offer to sell an interest in respect of a residential complex to a purchaser who is led to believe,

(a) that, along with the interest, he is acquiring the present or future rights to occupy a dwelling unit in the residential complex."

9:40 p.m.

To me, Mr. Chairman, that is quite clear. In my opinion -- and I would like the minister to confirm it if he agrees -- that rules out any kind of new or old occupancy agreement. It simply says that if, in the agreement or in the promotion which is not part of the agreement, the purchaser is led to believe he has a right at the present or in future to occupy units, then no person shall do that. He is subject to a major fine, and it gives a purchaser the right to withdraw or, if he does not find out about it until later, the right to sue for damages and probably get his money back.

What the member for Bellwoods seems to be hung up on, and I do not know if it has been answered completely, is this idea that when a tenant moves out then a purchaser or someone may have a right to get the unit. My interpretation of the Landlord and Tenant Act is that under that Landlord and Tenant Act, where a tenant has full right of occupancy and right of tenure, and the tenant moves out, the landlord then, if it is just a single owner, has the right to move any person he wants into that suite.

It would seem to be the same principle whether the owner is an individual, a corporation or a group of tenants in common. The only time that an owner can move in himself or can move in any person he chooses is, under the Landlord and Tenant Act, when a tenant who has right of tenure moves out and the suite is vacant. Then the tenants in common, or the individual owner under the same rule, can move a tenant in.

Am I correct in my interpretation that clause 2(1)(a) in effect says that either in a verbal agreement or in an agreement or promotion, no person in this kind of scheme can tell a prospective purchaser that in the present or future he has any right to occupy a unit and that under this therefore there can be no type of new occupancy agreement?

Hon. Mr. Elgie: Mr. Chairman, the member is correct in that he will not be selling with a co-tenancy agreement giving him any right to it, but that does not say that if a group of people bought an empty building they could not agree among themselves that they could occupy specific units but not own those units. They cannot be deceived into thinking they own a unit for their sole occupancy and that they have the right to evict any tenant who is there.

Mr. Cassidy: Mr. Chairman, I have been waiting for this debate for a couple of years now and I want to join with my friend the member for Bellwoods in saying that the minister has taken only a part of a problem and come up with a solution, but he certainly has not solved the whole problem.

The minister indicates that tenancy in common is time honoured and goes back into the mists of time in respect of property ownership in Britain and that kind of thing. My friend the member for Riverdale (Mr. Renwick) would probably assure me that this is the case. However, that kind of tenancy in common is more common in recreational complexes, cottages on islands and agricultural situations or, as the minister says, where perhaps three or four families or individuals co-own a piece of property. Often we might find a situation where, let us say, a family buys half a dozen or a dozen acres and then splits it among various members of the family, who put up residences and live in a tenants-in-common type of relationship.

What is new has been the development, as a means of evading municipal controls on condominiums and evading the Condominium Act, of these kinds of ersatz co-operatives, equity co-ops. I do not know what the devil they are called; they have all kinds of names, such as the ones my friend the member for Bellwoods indicated.

The minister knows that this does not represent a clear and logical continuation of the tradition of tenancy in common as it has been practised in this country; it is something that is quite new. It is something that emulates a condominium but is not a condominium. Of course, the reason it is not a condominium is that the developer finds there is money to be made by going this route; and quite probably they were blocked from creating a condominium for all of the good reasons there are controls on conversion of existing large multi-unit buildings into condominiums.

I think the minister is naïve in several respects and those are indicated in section 2. The first is that he says, if there are three or four occupants, then no problem. But that is not what we are talking about. We are talking about multiple units; we are talking about a sufficient number of units that it is not possible for the people to meet on a face-to-face basis and sort out their problems; that is, up to maybe eight or nine people. The minister also says the problem is the people who buy and then find out that they did not get what they thought they got, because they got an interest in a building but it did not have with it the right to actually move into the unit as they thought.

That problem is addressed in the bill but the minister does not at all address the problems of tenants who happen to occupy the building. From my experience in my riding, those problems can be intense, anguished and very difficult. Grave injustices have been done and will be done in the future under this bill because all the problems have not been thought through.

If this government was truly concerned about tenants, it would be concerned about the plight of those tenants who have the misfortune to live in a building in which the interests in common are sold. Instead of being a tenant of ABC Holdings or whatever the name of the company was, that tenant is now paying rent perhaps to the company, or perhaps even conceivably to an individual, who has acquired an interest in the building and a specific interest in that particular unit. That is what happens.

If the investors are like the people in the building my friend the member for Bellwoods mentioned, they have a feeling that unit is rightfully theirs. They paid out $60,000 or $70,000 for it in some cases. They may well be paying far more in mortgage and other costs for that unit than they are receiving in rent; therefore they have to pay out their own cash every month in order to make up the difference between the expenses and revenues. They feel it is wrong that the tenant should be able to stay there when they see this unit as being theirs. The fact they are told in advance, according to this bill, is not going to change that situation.

I lived in England in the late 1950s and am familiar with the situation created there because of the rent freeze that was British policy at the time. People living in rent-controlled units would become tenants of purchasers of a building. The purchasers of the building would be waiting until they could get rid of the tenant in order that they could either resell the whole building on a non-rent-control basis or perhaps get rid of the tenant and occupy that space themselves.

In one situation, an old lady would be living in a couple of rooms on the top floor of a house. A young family kept on having kids and wanted the space. They did everything possible to make life miserable for that old lady to get her out. Or there was Rachmanism. A landlord would get a bunch of toughs to move into the empty units of a building. They would raise hell, rape, pillage, drink and have parties all night until they finally gave the people in the rent-controlled units such a headache they would feel they had no choice but to move out for their own peace of mind.

That is what happened in Britain. That is what will happen and what continues to be a possibility under the bill the minister has introduced here.

I want to talk about a particular situation in my riding and I point out to the minister that his bill would not have affected that situation. I am speaking of the Mayfair apartments on Metcalfe Street in the middle of my riding. It is a fine old apartment building with middle-class rental accommodation. About three years ago it was taken over by a young sharpie, an entrepreneur, who decided he would evict the tenants, sell the units in common in this kind of arrangement and make lots of money.

The tenants were under rent control and they had tenure so he had to get them out. He decided he would make some renovations to the building. He would take some of the small units and join them to others in order to create larger apartments that might be more marketable. Quite arbitrarily, without consulting the tenants, he decided the plumbing needed to be replaced. The reason he wanted to replace the plumbing was because that is a sufficiently major renovation to evict the tenants under the Landlord and Tenant Act. That is exactly what he did.

The tenants may have a right to return in after the renovations are complete but, as the minister should know, that right is a fiction, particularly because rents are raised thereafter. If the unit is occupied by an owner-purchaser who bought an interest, then the tenant can do nothing about it at all.

9:50 p.m.

In this case, all but a handful of tenants were evicted. A few tenants hung on because they pointed out they were quite prepared to put up with a few weeks of renovations in order to keep their apartments. I think the last tenant moved out a few months ago. Now the units that used to rent in the $500 or $600 range and provided comfortable, decent, solid accommodation are on the market for $125,000 apiece.

The combination of the abuse of the Landlord and Tenant Act and the use of this device meant that landlord was able to get his way, and the landlord, the owner, would be able to get his way today if this bill was adopted, because no matter what he had to tell the tenants or the new owners, the fact is those units would be vacant because of the loophole in the Landlord and Tenant Act. So what the minister will generate is a whole series of phoney renovations just sufficient to justify evicting the tenants in order to get away from the provisions of section 2 of this act.

My colleague from Etobicoke is going to move a motion saying these things should not be allowed to be transacted unless there is municipal consent. It seems to me, if there is a kind of a pseudo-condominium, some new form of multiple unit ownership, which has suddenly started to spread like wildfire rather than being a kind of a curiosity in the law and something used in rural Ontario, if there is something new, at the very least it should come under the same strictures as condominium conversions of older buildings. We quite rightly say in Ottawa and other places that an older building cannot be converted to condominiums unless there is municipal consent or unless the vacancy rate is over a certain level, three or four per cent.

That rule is there to protect tenants. What this piece of legislation does, as my friend from Bellwoods says, is to legitimize something that was going on already. It will be clear to anybody who looks at the law, if a lawyer looks at the law, that having legislated once, the minister is not going to go ahead and legislate again and, therefore, the sky is the limit. Since they heard me say it in the Legislature, they will simply get some renovations going and that will be fine. There is lots of money to be made by ripping off tenants that way.

My friend from Bellwoods also pointed out, and I support him, that by legitimizing this device, the minister is creating a kind of old- fashioned joint stock company within which there is not the means to regulate such problems as what happens when one of the owners in common does not pay up on his common costs for this phoney co-operative? What happens if one of the mortgages is foreclosed? What happens if somebody does not pay the cost of the mortgage they meant to contribute? Litigation is costly and it takes years to go to the courts. In the meantime, the whole building could be jeopardized. All the unit holders under this arrangement could be jeopardized, including the people who had been paying their share, if a handful of the occupants decided not to pay up on their mortgages and the mortgagor foreclosed on the whole building.

What happens if a developer develops one of these things, prices it too high, sells a third of the interest and cannot sell the rest? Then those people who bought, who might have had protection under the Condominium Act, will find they have absolutely no protection at all. They are minority shareholders in an enterprise whose chief shareholder may well only be interested in saving his skin and making a lot of money at their expense.

How do you regulate disputes if the developer perhaps has sold units on the same floor, in one case to a rock star, and next door to a couple of elderly pensioners? How do you regulate disputes in that case? Those questions have not been looked at, and that is why we are saying this bill should not be passed. I know we are talking about section 2, but section 2 is inadequate. It does not solve the problem.

We have a tremendous number of legislative headaches coming up here, but worse than that is the real anguish, not just for people who buy, who can still get into trouble even if they think they know what they are getting into, but in particular for tenants who are going to be evicted quite legally under the loopholes left in the two acts I mentioned in conjunction with this bill.

Mr. Philip: I was about to move an amendment to section 2 of the bill. Is that appropriate, Mr. Chairman?

The Deputy Chairman: It is quite appropriate now. The honourable member may do so.

Mr. Philip: Mr. Chairman, I move an amendment to subsection 2(3) of the bill. I have provided it to the minister and to the chair. Is it necessary for me to read the whole thing into the record?

The Deputy Chairman: Yes, absolutely.

Mr. Philip moves the following amendment to subsection 2(3):

"(3) The purchaser of a residential complex must be advised by the vendor whether or not the permission required under subsection 2(4) has been obtained."

Subsection 2(4) is an addition to the bill:

"Subsection 2(4)(a) No person shall convert a residential complex to private ownership with the future right to occupy a residential unit in such property without the approval of municipal council.

"(b) The municipal council shall take into consideration the following factors, among others, when making that decision:

"(i) availability of the residential accommodation of the municipality;

"(ii) the condition of the residential complex;

"(iii) economic and social impact on present residents of the residential complex;

"(iv) proportion of present tenants in the residential complex who have indicated a desire to purchase the shares of a residential complex; and

"(v) the age of tenants in the residential complex."

Mr. Philip: The purpose of the amendment which I have spoken to in my opening statement is that I believe it is a basic principle that any alteration of the use of a residential rented building should have the approval of the municipal council. I think this is the principle that is embodied in the Planning Act that gives that power in the case of conversions to condominiums.

All we are saying is that there may be some small buildings where the tenants want to buy the building from the landlord, or there may be other instances where there may be some kind of justification, but in the majority of buildings, such as the ones in the Lakeshore area of Etobicoke, the council clearly would not have given permission. Indeed, the minister, if he had had any say in it, would not have given permission, nor the previous minister for that matter, and I see the previous minister sitting there.

All I am trying to do is to give some power under this act to the municipal councils to look at a proposed conversion or a building that is in the process of being converted and to pass a judgement on that.

I am the first to admit that the best way to handle this would be under the Planning Act, but the minister has clearly stated, as has his parliamentary assistant, that -- indeed, he has shown in relation to Bill Pr13 and its predecessor, Bill Pr3, that he does not want to interfere in what he considers to be the primary right of property owners.

Therefore, I am hoping that since this minister tends to be a little more progressive than the Minister of Municipal Affairs and Housing (Mr. Bennett) he may accept this amendment as a back door way of doing what really should be done under the Planning Act.

I do not want to speak further on it and I hope we can have a vote on it.

Mr. Boudria: Mr. Chairman, we have been looking at this amendment and I find it somewhat confusing.

First of all it states, "No person shall convert a residential complex to private ownership." That seems to suggest it was under something other than private ownership prior to the conversion in question and I am not quite sure what that would entail. What is the other form of ownership? Would that apply only to a building that was in public ownership that is now transferred to private ownership? The way it appears it is difficult to understand.

The second question I have is in the second line --

Mr. McClellan: You never understood it and you never will.

Mr. Boudria: Maybe the honourable member could explain how this amendment would work, since he drafted it.

The second line of it talks about the future right to occupy a residential unit. If I buy a triplex, a three-apartment building, surely I would like to have the right to occupy one of them for myself. As far as I can read this amendment, it would mean I would not be able to do that. In its present form, unless I am offered better explanations, I do not think I could support this amendment.

Interjections.

The Deputy Chairman: Order, please.

10 p.m.

Mr. Cassidy: Mr. Chairman, I do not want to prolong this, but I think this is a good amendment coming from my friend the member for Etobicoke (Mr. Philip). He has faced the problem which we have been talking about in his own riding. I quite admit that it does not make this an ideal bill. It is not an ideal bill to begin with, as my friend the member for Bellwoods (Mr. McClellan) has pointed out. But at the very least, if the municipality has the power to intervene, there is somebody, apart from the developer himself or herself, who is looking at the social acceptability of this conversion.

If it is a building up at Bathurst and Eglinton which has 150 senior citizens living in it, I do not think it is right that those people should be evicted in order that one of these tenants in common should be put in. Or that the people there who have a stable landlord situation should then be faced with the kind of unstable situation I mentioned, where there is a bunch of very hungry owners waiting for them to pop off, conspicuously hanging around the corridors looking at the life expectancy tables and hoping that they will have to be taken away to nursing homes. That is what will happen with this arrangement which the minister is endorsing.

It seems to me that the municipalities also are in a position where the public can get to them and talk to them in a way that they cannot get to this government: they can indicate where the problems are and can bring political pressure in order to stop the rampant conversion into private ownership of rental property which is suiting the needs of people on low and moderate incomes.

So I would hope, as my friend said, that the minister would be prepared either to accept this amendment or to hold the matter over for a few hours while the drafting is looked at in order to ensure that it meets the standards of the minister's bureaucrats -- accept the idea in principle and then let the House come back in a day or two to do it in actuality. Because it should be accepted; it is the very minimum protection for tenants that should be involved in this bill.

Hon. Mr. Elgie: Mr. Chairman, we on this side of the House cannot accept this amendment for a variety of reasons. First of all, it assumes that there is municipal approval, for example, to change the nature of a building and to change the tenants of the building.

This bill does not deal with the issues that are addressed in the amendment and we all know it. This bill is aimed at spiking a situation where there is misrepresentation and where people who purchase as tenants in common are being led to believe they will own a particular unit and have the right to evict anyone who is living in it. That is what the bill is aimed to do. It is not aimed at creating some law dealing with conversion to another use. Not at all.

I have to tell members quite sincerely and quite frankly that, after many discussions about this, I think it would be a very unwary group of people who would purchase a complex of this size with any honest belief that in any reasonable period of time they would ever achieve occupancy of a unit. I have already heard some people who are upset with this bill. I have heard rumours. So I have to tell members that I think it will achieve its purpose.

Mr. Wildman: Let the minister not be intimidated.

Hon. Mr. Elgie: I am not even intimidated by the member, to tell him the truth, if he wants me to be frank and honest about it.

This bill will serve the purpose for which it is intended. Whether or not abuses will arise in the future -- we passed section 60 thinking it would solve the problem but it did not. Now we are proposing another measure to protect consumers from being subject to misrepresentations. That is what we are aiming at doing, that is what this bill does, and I cannot accept the amendment.

The Deputy Chairman: Mr. Philip has moved an amendment to section 2. Is it the pleasure of the House the amendment carry?

All those in favour will please say "aye."

All those opposed say "nay."

In my opinion the nays have it.

Motion negatived.

Mr. Cassidy: The Liberals are voting with the government on that amendment. Is that correct?

The Deputy Chairman: All I listened to is ayes and nays.

Mr. Cassidy: I just want to confirm that the Liberals --

Interjections.

The Deputy Chairman: I am not confirming anything.

Mr. Cassidy: The Liberals voted against the tenants and with the government on that amendment. Let us just get it straight.

The Deputy Chairman: All I did was listen.

Hon. Mr. Elgie: Let me confirm that we are all supporting the tenants in this issue.

The Deputy Chairman: All I can tell the minister and honourable members is that the amendment is lost.

Are there any other amendments to section 2? Shall section 2 carry?

Mr. Kerrio: Mr. Chairman, on a point of order: Did I hear some of the members of the New Democratic Party vote against that amendment? I thought I did. They do not care about the tenants.

The Deputy Chairman: That is not a point of order. The honourable member knows by now that is not, by any means, even close to being a point of order.

Section 2 agreed to.

Section 3 agreed to.

On section 4:

Mr. McClellan: I move that section 4 be amended --

Interjections.

The Deputy Chairman: Is this an amendment? It is customary that a copy be delivered to the table.

Mr. McClellan: This is about to happen.

The Deputy Chairman: Please do so.

Mr. McClellan: If I had not been heckled from the chair, you would already have it.

The Deputy Chairman: It is not heckling, it is the procedure to be followed.

Mr. Kerrio: Some people are so honest.

Mr. McClellan: Is that a confession?

The Deputy Chairman: Order, please. The member for Bellwoods is about to move an amendment.

Mr. McClellan: I thought I was moving the amendment, but that was before I was shouted down, Mr. Chairman.

The Deputy Chairman: Mr. McClellan moves that section 4 be amended by deleting, in the second and third lines, "up to the time the transaction is complete."

Mr. McClellan: Mr. Chairman, I do not understand this little weasel clause, "up to the time the transaction is complete."

What we say in section 2 is that it is illegal to sell or offer to sell an interest in respect of a residential complex where the purchaser is given false information. No person shall sell or offer to sell if false information is provided. That is very clear in section 2. "No person shall sell or offer to sell."

However, in section 4, if they do sell or offer to sell and provide false information and deceive the purchaser, the transaction is only voidable up to the date of closing. In other words, the transaction is legal unless the purchaser exercises an option prior to the closure date.

Where I come from those are weasel words. There was a short closing date in the case of 100 Coe Hill Drive. They had a very short closing date. They had a number of people who were deceived with respect to their rights. They were misled with respect to the terms of the purchase and their rights to occupancy and they were told they could evict tenants if they purchased this apartment. We have a piece of legislation that is supposed to prevent that from happening and, lo and behold, it has the escape clause in section 4 that these kinds of purchases are voidable only up until the date of closing.

We cannot have it both ways. Either these kinds of transactions are illegal or they are legal. Am I missing something here? I do not think so. All he is saying is that they are legal under certain conditions. The condition is that the purchaser has to somehow clue in that he has been conned before the closing date. That is not going to happen. If people are in the position where they are susceptible to this kind of con, this kind of scam, they are not going to twig to the fact that there is a short closing date. They are going to be stuck with the purchase.

10:10 p.m.

I do not understand. If the ministry is serious about making these kinds of transactions impossible, why is the escape hatch there only up to the time the transaction is complete? I hope that at the very least the ministry will accept this amendment that these kinds of transactions are illegal.

I do not know whether the minister is paying any attention. Is he?

Hon. Mr. Elgie: Yes, I am listening.

Mr. McClellan: I think that if this kind of amendment were put forward, these kinds of transactions could not be registered. I am no expert, but I suspect that if the legislation were tightened up to simply make these kinds of transactions illegal, then they could not be registered; they could not take place. If they cannot be registered, they cannot take place. If they are voidable at any time, they will not take place.

But if they are legal -- assuming that if the ripoff artists can get past the closing date, they become legal -- then they will continue to take place. As we have said earlier in the debate, people will make the argument: "You will just have to be patient. Sooner or later this apartment, to which you have purchased the occupancy entitlement, will become vacant, and you will be able to move in. Just be patient; do not bother to sue us, because you are going to lose your $20,000 or $40,000 investment. This is all you have in the world. What do you want to sue us for? If you sue us, you will lose everything. If you be patient, just hang on and hold tight, eventually you will be able to move into the apartment."

I am absolutely convinced that these scams will continue unless the minister makes them illegal. My concern, again in a nutshell, is that he has not made them illegal; in fact, he has made them legal. He has set the terms and conditions under which this kind of scam can continue and will persist.

Is the minister prepared at this time either to accept this amendment or, if he is not satisfied with the language of the amendment, which admittedly is rather ad hoc, to stand the bill down for this evening, consult with his officials and perhaps come back at the beginning of the week or before we adjourn for Christmas? We are anxious to pass this legislation before we adjourn for the Christmas break. Is he willing to do that and come back with something that has more watertight protection in it? I am absolutely convinced that this is as full of holes as Swiss cheese.

Mr. Boudria: Mr. Chairman, I have read the clauses as well. The argument put forward by the member for Bellwoods seems to be quite reasonable, and unless the minister can convince us in his explanation that the fear of the member for Bellwoods can be alleviated, we will be supporting this amendment.

I wonder why it was put in there. Is it perhaps to allow the transactions that have already taken place in the past not to be affected by this? If that is the intent, why are they not grandfathered differently?

I have another question on the next line of the bill, and I am sure that a clarification on the minister's part will satisfy me. I might as well state it now, because it is on the same clause. It is the following seven or eight words: "at the option of the purchaser and the purchaser." I just wonder what that means. It may not be a typographical error; maybe there is an explanation for how that reads. Perhaps the minister can explain that to us at the same time.

Hon. Mr. Elgie: Mr. Chairman, the option to declare the transaction voidable is the option of the purchaser, and that purchaser, whether he exercises that option or not, may claim damages from the vendor.

Mr. Boudria: Only up until the time the transaction is complete?

Hon. Mr. Elgie: No. Suppose he exercises the option to declare the deal void; he can still sue for damages. But if the transaction has been completed and the deed registered, then his option is to sue for damages.

I think there is some misunderstanding here. People think there is no offence. There is an offence. Look at section 5: "Every person who contravenes any provision of this act is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $50,000 or to imprisonment for a term of not more than one year, or to both."

Clearly, that has nothing to do with section 4. Section 4 is an individual civil remedy. It has nothing to do with whether someone is convicted of an offence for having carried out something that is forbidden under this legislation. It would be simply catastrophic if people were able to start voiding contracts after they had been registered in the registry office in this province.

Mr. McClellan: Even if they are fraudulent?

Hon. Mr. Elgie: They just could not survive.

Mr. McClellan: That is what we are talking about -- fraudulent contracts.

Hon. Mr. Elgie: My friend should not talk such nonsense. I do not know what they taught him at York University, but at least he should understand that the registrar of deeds has no idea whether a misrepresentation is taking place; he is accepting documents and guaranteeing the title. For goodness' sake, let us not be silly about it. It is an offence. There is a penalty, and there are remedies provided in keeping with the legal system of this country.

Mr. McClellan: Mr. Chairman, what the minister is saying is that under the terms of Bill 113, a contract that is fraudulent with respect to the terms that are set out in section 2 of the bill has to be upheld under section 4 of the bill, if the conditions of section 4 are followed. I cannot accept that. The minister cannot have it both ways. He cannot pass legislation defining a fraudulent contract and then say, "Nevertheless, the contract will stand."

That is not consumer protection. I do not care what the minister says about my capacity to teach at York University; it is not consumer protection. The minister had better understand that. He has not solved the problem he set out to solve. I do not care what his officials have told him. As a lawyer, he makes a better neurosurgeon.

Hon. Mr. Elgie: Mr. Chairman, it is very difficult to comment on a remark when the member says whatever I say will not make any sense anyway. But the fact is that he really has not understood the bill. There is an offence. There is a penalty provision. There are remedies in keeping with the stage the process is at.

The member seems to be under some illusion that people who had purchased a portion of a building as tenants in common and suddenly found there had been a misrepresentation would not get significant damages in terms of where they were to live, what they had given up, what they might have lost in the domino effect of selling something to buy this. The member is not talking about a remedy that is feeble. He is talking about damages that may well be worth even more than the purchaser put into the property. It is far from a feeble remedy.

Mr. Cassidy: Mr. Chairman, if I could just comment on this, the problem is that justice delayed is justice denied. The remedy may be powerful if, as and when it is achieved, but it can take two or three years to achieve that remedy through the courts. Are the couple or family who have sold their house supposed to sit in a basement apartment for three years waiting for justice to be done? Is that what should happen?

The point of the amendment offered by my colleague the member for Bellwoods is that normally what may happen is people will discover after they have signed that the true situation is different from what they thought it was. They go rushing off to get a key and find out when the tenants are going to move out. That is when they find out they cannot get in.

Then they turn back and say: "We want to get out of this. Can we do anything?" They finally consult a lawyer. I admit they may have been naïve; none the less these situations exist. The lawyer says: "The law says if you had come to me two weeks ago, you could have voided it and you would have been scot-free. You would have got your money back with no problem. But I am sorry, now you are going to have to go to court."

10:20 p.m.

Hon. Mr. Elgie: They would have to prove a misrepresentation even then to void a contract.

Mr. Cassidy: It does not matter about that.

Hon. Mr. Elgie: It is the same legal process.

Mr. Cassidy: What?

Hon. Mr. Elgie: That has nothing to do with the charge being under section 5 and with the penalties under section 5. If one is going to bring a civil action claiming a remedy on the grounds of misrepresentation, it is an action, whether it is to void the transaction or to get damages. It is the same process entirely. The penalty provision with respect to a charge under the act is entirely different. I do not know what you have been studying lately.

Mr. Cassidy: With respect, Mr. Chairman, that just simply makes it worse. Now the minister says in order to void it, you are going to have to take some kind of civil action, which once again puts people into the courts. In other words, it is another roadblock in the way of effective implementation of the very limited goals the minister and his ministry have set out in terms of this particular bill. It is just not good enough, and I hope the amendment is adopted.

Alternatively, if he is concerned about these things going on forever, it seems to me that for a period of, say, six months after the transfer takes place and after the deal is closed, that capacity to void should continue. How do you void six months later? You simply reverse the transaction. It is quite clear. If the minister has to word it in some different way --

Hon. Mr. Elgie: Come on. You have to go to court to prove you have a case.

Mr. Cassidy: The minister is saying you have to go to court anyway. That is probably wrong as far as I am concerned. Certainly, the minister's argument does not hold water. I do not see why, to get justice when they have been defrauded, people should have to wait for years to go through the courts. What kind of protection is that?

We have seen one case today. They were debating for three and a half hours where the courts, on a very serious personal offence, take two years to act. That kind of justice delayed is justice denied. The minister can do better than that.

Hon. Mr. Elgie: Much better than you did, I can tell you.

Mr. Boudria: I would like one point clarified by the minister if I can get his attention back for a moment.

Mr. Cassidy: I will lend you my course books. You can take the course as well.

Mr. Boudria: I do not want to get involved in who should go to school where in this place. Maybe we could get back to the bill.

Hon. Mr. Elgie: Nobody can deny your brilliance, Michael. Nobody wants to admit it except you.

Mr. Boudria: Would I be correct if I stated that the amendment proposed by the member for Bellwoods would have the effect, if one customer out of a group of 200 investors that was buying a large building felt he had been misled, of causing the whole transaction to be deregistered for the other 199?

Hon. Mr. Elgie: A domino effect.

Mr. Boudria: Obviously, we cannot support that. I think allowing the due process of law to take care of the situation is far more reasonable.

Mr. Chairman: Do any other members wish to participate?

All those in favour of Mr. McClellan's amendment will please say "aye."

All those opposed will please say "nay."

In my opinion the nays have it.

Motion negatived.

Section 4 agreed to.

Sections 5 to 9, inclusive, agreed to.

Bill, as amended, ordered to be reported.

On motion by Hon. Mr. Drea, the committee of the whole House reported one bill with certain amendments.

The House adjourned at 10:26 p.m.