OMVIC OMVIC MVDA and Legislation 2 — Questions and Answers
Question 1: Under the Motor Vehicle Dealers Act (MVDA), 2002, which classes of persons are required to be registered with OMVIC?
- Motor vehicle dealers, motor vehicle salespersons, and motor vehicle brokers who trade in Ontario (Correct answer)
- Only dealership owners and general managers
- Only salespersons employed at franchised new-car dealerships
- Any person who sells more than one vehicle per year in Ontario
Correct answer: Motor vehicle dealers, motor vehicle salespersons, and motor vehicle brokers who trade in Ontario
The MVDA requires that anyone who carries on the business of trading in motor vehicles in Ontario — including dealers, salespersons, and brokers — must be registered with OMVIC. Trading without registration is a provincial offence.
The MVDA, 2002 established OMVIC as the delegated administrative authority to administer registration. Dealers (including new car dealers, used car dealers, lease dealers, and wholesalers), salespersons, and brokers are all required to be registered. Registration ensures that participants in the industry meet minimum standards of conduct, financial responsibility, and competence. Operating without registration can result in prosecution, fines, and being prohibited from trading.
Question 2: What is the role of OMVIC's Discipline Committee under the MVDA?
- To hear and decide cases where OMVIC's Registrar has proposed to revoke, suspend, or impose conditions on a registrant's registration (Correct answer)
- To set the fees for vehicle dealer registration
- To approve all vehicle purchase contracts before they are signed
- To adjudicate disputes between consumers and insurance companies
Correct answer: To hear and decide cases where OMVIC's Registrar has proposed to revoke, suspend, or impose conditions on a registrant's registration
OMVIC's Discipline Committee is an adjudicative body that hears cases where the Registrar proposes adverse action against a registrant, such as revoking or suspending their registration or imposing conditions. It ensures procedural fairness for registrants facing regulatory action.
Under the MVDA, when the Registrar proposes to revoke, suspend, or impose conditions on a dealer's or salesperson's registration, the registrant has a right to a hearing before OMVIC's Discipline Committee. The committee reviews the evidence and the registrant's response before deciding whether the proposed action is warranted. This provides an independent review mechanism and ensures that regulatory decisions are made fairly. Decisions of the Discipline Committee can be appealed to the Licence Appeal Tribunal (LAT).
Question 3: Under the MVDA and OMVIC regulations, what must a dealer do when they take a vehicle in on consignment for sale?
- Enter into a written consignment agreement with the owner specifying the terms, and disclose to buyers that the vehicle is being sold on consignment (Correct answer)
- Register the vehicle in the dealer's own name before offering it for sale
- Obtain the owner's verbal consent only — no written agreement is required
- Treat it identically to any other used vehicle with no additional disclosure
Correct answer: Enter into a written consignment agreement with the owner specifying the terms, and disclose to buyers that the vehicle is being sold on consignment
Consignment sales require a written agreement between the dealer and the vehicle's owner. Dealers must also disclose the consignment arrangement to prospective buyers, as this affects representations about the vehicle's history and the dealer's knowledge of it.
OMVIC's Registrar's Standards require dealers selling vehicles on consignment to have written consignment agreements that set out the terms of the arrangement, including the agreed sale price and how proceeds will be distributed. Buyers must also be informed that the vehicle is being sold on consignment. This matters because the dealer may have less knowledge of the vehicle's history than they would for a vehicle they purchased outright, and transparency helps consumers make informed decisions.
Question 4: The MVDA grants OMVIC inspectors the authority to:
- Enter registered dealer premises, examine records, and inspect vehicles to ensure compliance with the MVDA (Correct answer)
- Arrest and detain individuals suspected of vehicle fraud
- Issue criminal charges against dealers found to have violated the Act
- Set vehicle prices on behalf of consumers during disputes
Correct answer: Enter registered dealer premises, examine records, and inspect vehicles to ensure compliance with the MVDA
OMVIC inspectors have statutory powers under the MVDA to enter dealer premises, examine books and records, and inspect vehicles as part of compliance audits or complaint investigations. These are administrative inspection powers, not criminal enforcement powers.
Section 18 of the MVDA authorizes OMVIC inspectors (designated under the Act) to enter the business premises of registered dealers at reasonable times, inspect records, examine vehicles, and question employees to assess compliance with the Act and its regulations. These are civil/administrative powers. If criminal conduct is suspected (such as fraud or odometer tampering), OMVIC refers the matter to police. Inspectors cannot make arrests, but obstructing an inspector is itself a provincial offence.
Question 5: Under the MVDA, which of the following is a ground for refusing to grant or renew a dealer's registration?
- The applicant has been convicted of a relevant criminal offence or has a history of conduct that demonstrates they are not suitable to act as a dealer (Correct answer)
- The applicant has not been in business for at least 5 years
- The applicant operates from a location more than 50 kilometres from an OMVIC regional office
- The applicant's dealership is not affiliated with a major vehicle manufacturer
Correct answer: The applicant has been convicted of a relevant criminal offence or has a history of conduct that demonstrates they are not suitable to act as a dealer
The MVDA gives the Registrar broad grounds to refuse registration, including past criminal convictions for relevant offences and a history of conduct inconsistent with the honest and competent carrying on of the vehicle trade. Character and suitability are key criteria.
Under the MVDA, the Registrar may refuse to grant or renew registration if the applicant or their officers/directors have been convicted of fraud, theft, or other relevant offences, or if their past conduct in business demonstrates they are not suitable to carry on as a dealer or salesperson. Financial responsibility, adequate premises, and compliance with insurance requirements are also considered. This screening process is central to OMVIC's consumer protection mandate — ensuring that only suitable persons participate in the vehicle trade.
Question 6: Which regulation made under the MVDA establishes the specific requirements for what must be included in a vehicle purchase contract?
- Ontario Regulation 333/08 (General) under the MVDA (Correct answer)
- The Highway Traffic Act, R.S.O. 1990
- The Sale of Goods Act (Ontario)
- The federal Motor Vehicle Safety Act
Correct answer: Ontario Regulation 333/08 (General) under the MVDA
Ontario Regulation 333/08 made under the MVDA is the key general regulation that prescribes contract requirements, records retention, consignment rules, advertising standards, and other operational requirements for registered dealers and salespersons.
While the MVDA establishes OMVIC's mandate and core registration requirements, the detailed requirements for how dealers must operate — including what must appear in a purchase contract, record-keeping obligations, consignment rules, and prohibited conduct — are set out in Ontario Regulation 333/08 (General). Salespersons must be familiar with this regulation as it governs the day-to-day conduct of the vehicle trade in Ontario.
OMVIC OMVIC MVDA and Legislation 2
Under the Motor Vehicle Dealers Act (MVDA), 2002, which classes of persons are required to be registered with OMVIC?