Legal Requirements Flashcards

Under the Motor Vehicle Dealers Act, 2002, a dealer sells a used vehicle and later discovers a prior lien was not discharged at time of sale. The buyer demands resolution. Which statement BEST describes the dealer's legal obligation?

Answer: The dealer must discharge the lien at their own expense and ensure the buyer receives clear title, regardless of when the lien is discovered

Under the MVDA and general contract law, a dealer is obligated to convey clear title to the buyer. If an undischarged lien is discovered post-sale, the dealer bears the full cost and responsibility of discharging it. The buyer's right to clear title is absolute — the timing of discovery or PPSA registration date does not limit the dealer's liability.

A salesperson registered under OMVIC is terminated by their employing dealership on a Friday. Under Ontario Regulation 333/08, which of the following is accurate regarding their registration status?

Answer: The salesperson's registration is automatically suspended upon termination and they cannot conduct any registrant activities until re-employed by a registered dealer

Under Ontario Regulation 333/08, a salesperson's registration is tied to their employing dealer. Upon termination of employment, the salesperson's registration is effectively suspended — they cannot trade in motor vehicles independently or on behalf of any unregistered entity. They must be hired by another registered dealer and transfer their registration before resuming registrant activities.

A dealer's advertisement lists a vehicle at $19,995 'plus applicable taxes.' The vehicle also carries a $699 administration fee and a $349 documentation fee. Under OMVIC's advertising standards and the Consumer Protection Act, 2002, this advertisement is:

Answer: Non-compliant, because all mandatory charges payable by the buyer — including dealer fees — must be included in the advertised price

OMVIC's advertising standards require that the advertised price include ALL charges the consumer must pay to take possession of the vehicle, except government fees and taxes. Dealer-imposed fees such as administration and documentation fees are not government-mandated and therefore must be incorporated into the advertised price. Burying them separately violates OMVIC advertising rules and constitutes an unfair practice under the Consumer Protection Act, 2002.

Under the MVDA, 2002, OMVIC's Registrar issues a proposal to revoke a dealer's registration due to a pattern of misrepresentation. The dealer disagrees and wants to contest the decision. What is the CORRECT procedural path?

Answer: The dealer may request a hearing before the Licence Appeal Tribunal (LAT) within 15 days of receiving the notice of proposal

Under the MVDA, 2002, when the Registrar issues a notice of proposal to revoke, suspend, or impose conditions on a registration, the affected registrant has the right to request a hearing before the Licence Appeal Tribunal (LAT) — formerly FSCO's appeals arm — within 15 days of receiving the notice. Failing to request a hearing within that window allows the Registrar's proposal to take effect as an order.

A curbsider (unregistered seller) repeatedly sells vehicles by posing as a private seller. Under the MVDA, 2002, which threshold most directly triggers the legal presumption that a person is 'carrying on the business' of trading in motor vehicles and therefore requires registration?

Answer: Any pattern of buying and reselling vehicles with the intent to profit, regardless of frequency, can constitute trading in motor vehicles requiring registration

The MVDA does not rely solely on a fixed numeric threshold. While Ontario Regulation 333/08 references frequency as one indicator, the Act's definition of 'trade' is broad — it captures anyone who buys, sells, offers for sale, or deals in motor vehicles as a business or regularly or persistently. A pattern of profitable resales, even if below an arbitrary count, can satisfy the test. Courts and OMVIC look at intent, profit motive, and repetition holistically.

A registered salesperson at a franchise dealership personally acquires a used vehicle, reconditions it, and resells it for a profit without disclosing their registrant status to the buyer. Under the MVDA, 2002 and OMVIC's standards, this conduct is:

Answer: A violation, because registrants must disclose their status when trading in motor vehicles, even in a personal capacity

Under the MVDA and OMVIC's Code of Ethics, registrants have ongoing disclosure and conduct obligations that extend beyond their employment role. A registrant who trades in motor vehicles — even personally and privately — must disclose their status as a registered motor vehicle salesperson to the other party. Failure to do so constitutes a breach of the Act and OMVIC standards, and the salesperson may also be conducting an unauthorized trade outside the scope of their dealer's registration.