A Vehicle Dealer Information Guide - Government Of Saskatchewan

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A Vehicle Dealer Information GuideA summary of theVehicle Dealer RegulationsNote to ReaderNew vehicle dealer provisions (hereafter referred to as the “vehicle dealer regulations”), are found inPart V of The Consumer Protection and Business Practices Regulations, which are regulations flowingfrom The Consumer Protection and Business Practices Act. These vehicle dealer regulations replace andupdate The Motor Dealers Act and came into effect February 1, 2016.The guide is intended to the familiarize dealers with the regulations and is hyperlink enabled athttp://fcaa.gov.sk.ca/cpd-vd. Check periodically for updates.Disclaimer - these guidelines summarize the position of the Director of Consumer Protection andBusiness Practices on the issues raised herein and does not constitute legal, business or otheradvice and should not be relied on as such. The relevant sections of The Consumer Protectionand Business Practices Act and its associated regulations should always be consulted for anylegal interpretation or application. Readers should consult with legal counsel for the legalinterpretation or application of The Consumer Protection and Business Practices Act and itsassociated regulations.February 1, 2016

TABLE OF CONTENTS1.2.3.4.GENERAL INFORMATION . 5A.Vehicle Dealer Legislation . 5B.Contact Information . 5C.References and Key Definitions . 5D.Vehicle Dealer Licence required [5-8; 5-10(1); and s. 55, 56 of The Act] . 6E.Exemptions from the Requirement to hold a Vehicle Dealer Licence . 6F.Offense to Operate Without a Licence . 8G.Separate Licence for Each Location [5-10(2),(3)] . 9H.FCAA411 (web register) . 9I.Brokers - Modified Rules [5-10(4)] . 9J.Vehicle Rental Company – Modified Rules [5-7(n);[5-10(5)] . 10BECOMING A LICENSED VEHICLE DEALER . 11A.Vehicle Dealer Licence Application Requirements [5-12]. 11B.Registration with Information Services Corporation ISC Required . 11C.Electronic Filing Required . 11D.Financial Security Required [5-15] . 12E.Criminal Record Check on Initial Application [5-12] to be Periodically Updated [5-16(1)].12F.Premises Requirements [5-14] . 13G.Repair Facility [5-14(3); 5-10(4),(5)] . 13H.Transfer of Licence Prohibited [s. 67 of the Act] . 14ANNUAL FILINGS & FEES . 14A.Annual Filing Requirements [5-4; 5-5]. 14B.Annual Licensing Fee [5-11] . 14C.Licensee to notify director if circumstances change [s. 70 of The Act]. 15ADVERTISING [5-21] . 15A.Anti-competitive, Unfair or Deceptive Practices Provisions . 15B.The Vehicle Dealer Regulations [5-21] . 17I.ADVERTISING . 17II .CONTENT OF ADVERTISING . 171

III .ADVERTISED SELLING PRICE . 18IV.FINANCING/TRADE-IN FEES . 18V.ADDITIONAL FEES . 18VI .TIME-LIMITED SALES PRICES . 18VII .STOCK N UMBER . 19VIII .LOT ADVERTISEMENT . 19IX.MANUFACTURERS’ PRICE STICKER . 19X.ADVERTISING LOAN PAYMENT PRICES . 20xi. NATIONAL ADVERTISING . 20xii. RECORD OF ADVERTISING [5-19(5)] . 205.C.The Cost of Credit Disclosure Act (if engaged in financing or leases) . 20D.Local Municipal Bylaws (premises, signage, hours of operation, etc.) . 22E.The Canadian Code of Advertising Standards . 22DISCLOSURE TO THE BUYER PRIOR TO A SALE [5-20; 5-22] . 22A.Material fact . 23B.Elements of the Contract [5-25]. 23C.The Drive-away Price . 24D.Vehicle Information [5-20(3)] . 24E.Remedy for Non-Disclosure [5-23] . 256.TAKING A PURCHASE DEPOSIT [5-24] . 267.MINIMUM POWER TRAIN WARRANTIES ON USED VEHICLES – BEST PRACTICE SUGGESTIONS .268.FORMS OF CONTRACT . 27A.Endorsed Forms of Contract [5-13] . 27B.Contract Content Requirements [5-25] . 28C.Additional Contract Requirements for Leases [5-25(4)] . 28D.Consignment contract with Vehicle Seller [5-27] . 28E.Responsibilities on the sale of a consigned Vehicle [5-28] . 29F.Separate Contracts for each sale or lease [5-25(5)] . 29G.Each Owner must be listed on the Contract [5-25(6)] . 29H.Contract Must be Signed and given to Purchaser [5-25(7)] . 30I.Vehicles Sold at an Auction [5-25(3)] . 309.MINIMUM POWER TRAIN VEHICLE WARRANTY [5-29] . 3010.VEHICLE RETURNS . 3111.PROHIBITED SALES [5-20] . 322

12.DEALER RECORD KEEPING REQUIREMENTS [5-19] . 3413.TRANSITIONAL PROVISIONS . 3614.LICENSING CONDITIONS [s. 63 - 71 of The Act] . 37A.Terms and Conditions . 37B.Suspension or Cancellation . 37C.Appeals. 37Index of Key Words/Phrases . 40SASKATCHEWAN REGULATIONS 72/2015 . 413

Quick Summary of some Key ChangesAdvertising – new rules (see section 4)Including the requirement where the price of a vehicle is listed in an advertisement to show astock number and to keep a record of every advertisement.Annual filing required (see section 3)Once licensed, the licence is considered to be continuous unless otherwise suspended, cancelled orsurrendered.On initial application and thereafter, annually, the dealer must sign and submit a declarationverifying that the information in the application is correct and has not changed since the previousfiling. If there has been a change, an update is required. Failure to file this annual report, updateinformation, or pay the required annual fee may result in suspension or cancellation of the licenceDrive-away price (see paragraph 4Biii, 5C)A selling price is not required in advertisements - but if the dealer advertises the vehicles price inan advertisement [5-21(2)(i) or on the sales lot at the dealer’s premises [5-21(3)], the priceadvertised or listed must be the drive-away price.If the consumer elects to purchase the vehicle as advertised (that is, without a trade, financing orextra items), the price to be paid for the vehicle is the advertised price or less (if the parties soagree) plus GST and PST, if applicable.Leases are now covered (see subsection 1D)In Saskatchewan, the business of selling vehicles, leasing vehicles, offering vehicles for sale, or takingvehicles on consignment are all designated activities that require the business operator to be licensed asa vehicle dealer.Material fact disclosure (see section 5)The buyer must be given any material fact or they may be able to cancel the transaction or make a claimfor damages. A “material fact” is information is known to the dealer or that the dealer shouldreasonably be expected to know that could reasonably be expected to influence a reasonableconsumer’s decision to buy or lease, or refuse to buy or lease, a vehicle from the dealer.Minimum Power Train Vehicle Warranty (see section 9)If the vehicle has been driven a distance less than 200,000 kilometres, the dealer must provide aminimum warranty on the power train for 30 days or 1,000 kilometres, whichever occurs first.Violation to sell trade-ins to an unlicensed dealer (see section 11)No dealer shall sell a vehicle to a person who is not licensed as a vehicle dealer (aka a “curber”), ifthe selling dealer knows or should reasonably be expected to know that the person is in thebusiness of purchasing vehicles for the purpose of resale.4

1. GENERAL INFORMATIONA. Vehicle Dealer LegislationLegislation governing the vehicle dealer sector are found within Part V (the Designated Activities andLicensing sections) of The Consumer Protection and Business Practices Regulations attached to TheConsumer Protection and Business Practices Act. On February 1 2016, these regulations replaced TheMotor Dealers Act.The Act and the Regulations are administered by the Financial and Consumer Affairs Authority (FCAA).The lead vehicle dealer administrator is the Director of Consumer Protection and Business Practices (the“director”). The director is supported by a deputy director, licensing officers and investigators.B. Contact InformationConsumer Protection DivisionFinancial and Consumer Affairs AuthoritySuite 500 - 1919 Saskatchewan DriveRegina, SK S4P 4H2Email: consumerprotection@gov.sk.caPhone: (306) 787-5550Toll Free: 1-877-880-5550Fax: (306) 787-9779Current web page - http://www.fcaa.gov.sk.ca/CPD-VDNew vehicle dealer regulations information web page - http://fcaa.gov.sk.ca/vehicledealersC. References and Key DefinitionsReferences in this document should be understood as being taken from The Consumer Protection andBusiness Practices Regulations unless otherwise noted. These references are placed within brackets toassist the reader in finding the related legislative authority. For example, “[5-7]” is intended to be areference to section 5-7 of The Consumer Protection and Business Practices Regulations. When referringto sections in The Consumer Protection and Business Practices Act, and not the regulations, the phrase“of the Act” will be added (e.g. s 108 of the Act); this should alert the reader to look to the Act.Key Definitions [5-7]Vehicle is defined as any self-propelled vehicle required to be registered pursuant to The Traffic SafetyAct and includes cars, SUV’s, trucks including commercial trucks, buses, motor bikes, motorized RV’s andby definition, snowmobiles.Dealership means a business that:(i) sells or leases vehicles or offers vehicles for sale or lease; or(ii) takes vehicles on consignment.Dealer means a person carrying on the business of a dealership or who holds himself or herself out as adealer, whether on the person’s own account or on the account of any other person, and includes, whenthe context requires:(i) a broker;(ii) a person who is in the business of selling repossessed vehicles, whether on his or her own behalfor on behalf of another owner;5

(iii) a vehicle rental company that sells vehiclesBroker means a person whose business is restricted to the buying and selling of vehicles exclusively fordealers, or any person who holds himself or herself out as a broker.D. Vehicle Dealer Licence required [5-8; 5-10(1); and s. 55, 56 of The Act]In Saskatchewan, the business of selling vehicles, leasing vehicles, offering vehicles for sale, or takingvehicles on consignment are all designated activities that require the business operator to be licensed asa vehicle dealer.Section 5-8 and subsection 5-10(1) of The Consumer Protection and Business Practices Regulationsread:5-8 For the purposes of section 55 of the Act, the selling or leasing of vehicles by a dealer isdesignated as a business to which Part VII of the Act applies.5-10(1) Every dealer shall hold a valid licence to sell or lease vehicles.Sections 55 and 56 of The Consumer Protection and Business Practices Act read:55 The Lieutenant Governor in Council may, by regulation, provide that this Part applies to thewhole or a part of a trade, business, industry, employment or occupation designated in theregulations.56 No person may engage in a designated business unless the person holds a licence pursuant tothis Act that authorizes the person to engage in that business.This licensing requirement applies to persons in the business of selling vehicles on behalf of [5-9(2)] Creditors, andA trustee in bankruptcy, receiver, liquidator, sheriff, collateral recovery agent or person actingunder an order of a court or by statutory authority or an executor, estate trustee or othertrustee or a lawyer who sells a vehicle in the course of the person’s duties or professionalcapacityE. Exemptions from the Requirement to hold a Vehicle Dealer LicenceThe following businesses do not require a vehicle dealer licence:1. A person (other than a person licensed as a broker) who only sells vehicles to dealers;2. An auction sales company licensed under The Auctioneers Act that sells at auction only vehiclesowned by others and not owned by itself (if the auction sells its own vehicles or sells vehicles forothers outside of an auction, a licence is required);3. The sale of vehicles by Saskatchewan Government Insurance or an insurer licensed pursuant to TheSaskatchewan Insurance Act as a result of administering an insurance claim;6

4. A person:i. who trades in vehicles solely for the purpose of providing or facilitating financing for thepurchase or lease of a vehicle;ii. who sells a vehicle to a dealer that the person has repossessed or seized under a securityagreement; oriii. whose dealings in vehicles are incidental to his or her ordinary business of lending money ordealing in financial contracts or instruments;The position of the Director of Consumer Protection and Business Practices (the “Director”) is that abusiness must be licensed if it leases vehicles to a Saskatchewan resident; unless the business can beshown to fit into one of the exemptions contained in subsection 5-9(1). The exemption section relevantto businesses who offer financing and leasing state:5-9(1) This Division does not apply to the following:(d) subject to subsection (2), a person:(i) who trades in vehicles solely for the purpose of providing or facilitating financing forthe purchase or lease of a vehicle;(ii) who sells a vehicle to a dealer that the person has repossessed or seized under asecurity agreement; or(iii) whose dealings in vehicles are incidental to his or her ordinary business of lendingmoney or dealing in financial contracts or instruments;(2) A person who is in the business of selling vehicles for or on behalf of the entitiesmentioned in clauses (1)(d) and (h) is a dealer for the purposes of this Division.For purposes of (d)(i), The Director takes the position that a business is solely involved in facilitatingfinancing for a purchase or sale of a vehicle when said business is also not involved in the on-goingmanagement of that vehicle. A business could be said to be involved in the management of vehicles ifone or more of the following is present:-The business is the primary agent and point of contact with the lessee at the time of lease signup;The business has a showroom which contains vehicles available for lease;The business is the primary agent and point of contact with the lessee at the end of the leaseterm, where among other things the lease buyout is managed by said business;If one or more of the above is present, the Director takes the position that a vehicle dealer licence isrequired.7

Note that a person in the business of selling vehicles on behalf of the entities mentioned in thisexemption is required to be licensed.5. A secured creditor enforcing his or her security interest;6. An unpaid commercial lien claimant within the meaning of The Commercial Liens Act who sells avehicle to satisfy a lien, unless that person is otherwise a dealer;7. A business or government agency selling its own fleet vehicles if the vehicles have been owned bythe business or government agency for more than one year (‘fleet vehicles’ [5-7] means vehiclesowned by a business or government agency and used by the employees of the business orgovernment agency for business purposes);8. A trustee in bankruptcy, receiver, liquidator, sheriff, collateral recovery agent or person acting underan order of a court or by statutory authority or an executor, estate trustee or other trustee or alawyer who sells a vehicle in the course of the person’s duties or professional capacity;Note that a person in the business of selling vehicles on behalf of the entities mentioned in thisexemption is required to be licensed.9. A manufacturer, exporter, importer or distributor of vehicles that sells vehicles only to a licenseddealer or to a person who sells vehicles to a licensed dealer;10. A person who leases vehicles to consumers for a term of less than 120 days and does not sell theirown vehicle inventory to consumers at the end of the vehicle’s business life cycle.F. Offense to Operate Without a LicenceIt is an offense to operate as a dealer without holding a valid licence [s. 108 & 109 of The Act]. Violatorsare subject to prosecution, fines and/or jail terms.Sections 108 and 109 of The Consumer Protection and Business Practices Act reads:108(1) No person shall:(a) contravene any provision of this Act, the regulations or an order of the director pursuant to thisAct;(b) refuse or fail to furnish information as required by this Act or the regulations, or furnish falseinformation to a person acting pursuant to this Act;(c) fail to comply with an order of the court; or(d) fail to comply with a voluntary compliance agreement entered into pursuant to section 80 unlessthe agreement has been rescinded by written consent of the director or by the court.(2) Any individual who contravenes subsection (1) is guilty of an offence and liable on summaryconviction:(a) for a first offence, to a fine of not more than 5,000, to imprisonment for a term of not morethan one year or to both; and8

(b) for a second or subsequent offence, to a fine of not more than 10,000, to imprisonment for aterm of not more than one year or to both.(3) Any corporation that contravenes any provision of this Act or the regulations is guilty of an offenceand liable on summary conviction:(a) for a first offence, to a fine of not more than 100,000; and(b) for a second or subsequent offence, to a fine of not more than 500,000.109 Every director, officer or agent of a corporation who directed, authorized, assented to or acquiescedin or participated in an act or omission of the corporation that would constitute an offence by thecorporation is guilty of that offence and is liable on summary conviction to the penalties provided forthat offence whether or not the corporation has been prosecuted or convicted.G. Separate Licence for Each Location [5-10(2),(3)]A separate licence is required for each location from which a person carries on business as a dealer,unless all three of the following apply (in which case only one licence is required):1. The locations have the same business name; and2. are within one kilometer of each other; and3. form part of the same business.Exception - an additional separate licence is not required if the dealer carries on business from aseparate location other than the main location for not more than 30 days in any calendar year. Anadditional separate licence would be required if the operation from the separate unique locationexceeds 30 days each.H. FCAA411 (web register)Once licensed, every licensed Saskatchewan vehicle dealer is listed on the FCAA webpage at FCAA411I. Brokers - Modified Rules [5-10(4)]Broker means a person whose business is restricted to the buying and selling of vehicles exclusively fordealers. Such a person requires a vehicle dealer-broker’s licence which in turn facilitates entrance todealer-only auctions.A broker is required to follow the vehicle dealer rules, however the broker is exempted from thesections below. These exemptions are found in subsection 5-10(4) which reads:Clauses 5-12(1)(d), (h) and (i), sections 5-13 and 5-14, subsections 5-21(2), 5-22(2), 523(1) and 5-24(1) do not apply to a dealer who is a broker.Thus, the following rules do not apply to brokers: The premises requirements of section 5-14 The consumer sale/consignment contract requirements of the regulations The repair facilities requirement of subsection 5-14(3) The advertising requirements of subsection 5-21(2) The material fact disclosure requirement of subsection 5-22(2) The non-disclosure remedy of subsection 5-23(1)9

The advance deposit limitation of subsection 5-24(1)Notwithstanding the above ‘do not apply provisions,’ all record keeping requirements apply (see [5-19]).J. Vehicle Rental Company – Modified Rules [5-7(n);[5-10(5)]Vehicle Rental Company means a person or partnership whose business is renting vehicles on a shortterm basis to consumers [5-7(n)].Short-term is to be understood to mean the lease of a vehicle for a term of less than 120 days [5-9(1)(j)].A vehicle rental company who leases vehicles to consumers for a term of less than 120 days and doesnot sell its own vehicle inventory to consumers at the end of the vehicles business life cycle is notrequired to be licensed as a vehicle dealer.A vehicle rental company who leases vehicles to consumers for a term of more than 120 days or sells itsown or other inventory to consumers is required to be licensed as a vehicle dealer.A vehicle rental company that is required to be licensed is required to follow the vehicle dealer rules.However, it is exempted from the sections below. These exemptions are found in subsection 5-10(5)which reads:Subsection 5-14(3), clause 5-25(2)(j), subsection 5-25(4) and sections 5-26 to 5-29 do not apply to adealer that is a vehicle rental company [5-10(5)].Thus, the following do not apply to short-term vehicle rental companies: The repair facilities requirement of subsection 5-14(3) Details of a trade-in (as no trade–in’ s should be occurring); see clause 5-25(2)(j) The lease contract requirements of subsection 5-25(4) The consignment contract provisions of sections 5-26, 5-27 and 5-28 The minimum warranty provisions of section 5-29Notwithstanding the above ‘do not apply provisions,’ all record keeping requirements apply (see [5-19]).10

2. BECOMING A LICENSED VEHICLE DEALERA. Vehicle Dealer Licence Application Requirements [5-12]In order to be licensed as a vehicle dealer, every such applicant must:1. register a business name and if a corporation or a partnership register those entities with theInformation Services Corporation (ISC);2. file an electronic application on the FCAA-RLS platform for each location from which a dealer doesbusiness ;3. designate land and building(s) located in Saskatchewan from which to conduct business as a vehicledealer;4. electronically file copies of bills of sale, lease agreements or consignment sales contracts with thedirector;5. provide financial security to the Director (minimum 25,000);6. file a recent criminal record check (90 days or less) of all officers with the Director; and7. pay the applicable licensing fees.See below for further details.B. Registration with Information Services Corporation ISC RequiredBefore beginning the Vehicle Dealer's application process, the director requires the dealer to register itsbusiness, or firm, and/or corporate name with the Corporate Registry of the Information ServicesCorporation (ISC). Visit www.isc.ca/CorporateRegistry or call 306-787-2962 for more information.The ISC registration must be kept active for the life of the licence. There is a periodic fee required by ISCto keep this registration active.The name must be registered with ISC in one of these ways: As a sole proprietor - this is business name of the one individual who owns the businessAs a partnership - this could be a partnership between individuals or between corporationsAs a corporationC. Electronic Filing RequiredThe Vehicle Dealer Application is to be filed electronically on the FCAA RLS platform.On filing, the applicant must provide:1. the vehicle dealer’s business name and corporate name if a corporation that has beenregistered with the Information Services Corporation (ISC);2. the name of the principal contact person for the licensee;3. a business phone number registered in the name of the licensee;4. an email address where notices and other documents required to be delivered or sent to thelicensee may be sent;5. evidence, generally by way of photographs, that the dealer meets the premises requirements11

(see premises requirements – section 2F of this document);6. the applicable licensing fees;7. a security bond or other suitable financial instrument (requires an original paper copy to befiled with the director)8. a criminal record check for the business principals;9. copies of each sales/lease contracts;10. a declaration verifying the correctness of the information in the application; and11. any other information that the director directs.An application i

A Vehicle Dealer Information Guide . A summary of the . Vehicle Dealer Regulations . Note to Reader . New vehicle dealer provisions (hereafter referred to as the "vehicle dealer regulations"), are found in . dealers, or any person who holds himself or herself out as a broker. D. Vehicle Dealer Licence required [5-8; 5-10(1); and s. 55, 56 .

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