Overview
On June 6, 2024, the Homeowner Protection Act, 2004 came into force, which amended the Personal Property Security Act, ending the era of Notices of Security Interest (NOSIs) for consumer goods in Ontario.[1] The amendment has banned the registration of NOSIs for consumer goods—defined as goods used or acquired for use primarily for personal, family or household purposes.[2] Consumer goods include items intended for personal, family, or household use, such as furnaces, air conditioners, and water heaters.[3] Now, any consumer good NOSI registered against a property’s title before June 6, 2024 can be deleted.[4] With this ban, Ontario seeks to better protect homeowners from unexpected liens and make property transactions more transparent.[5]
NOSIs are registrations on the land registry system and can be made by a business when it rents, finances or leases fixtures installed on a property.[6] They were intended to protect business interests by preventing a property, containing its fixture, from being sold or refinanced unless the rental contract is paid out in full or “postponed” (allowing the new mortgage to sit in first priority).[7]
This legislative ban follows growing concerns of NOSI misuse in recent years.[8] Some bad actors have used NOSIs to extort exorbitant payments from homeowners and discourage them from changing service providers.[9] Since NOSIs are not a lien or a mortgage, businesses never had to inform a homeowner when they registered an interest against their title. Unfortunately, NOSIs were often discovered when homeowners tried to refinance or sell their property.[10] Before selling, homeowners were threatened by large removal fees to delete the lien.[11] Without enough time to dispute the lien with Consumer Protection Ontario or take legal action to have it removed, homeowners were forced to pay exorbitant removal fees. [12]
Importantly, the ban only invalidates NOSIs registered on title—it does not affect any existing contractual rights. If a homeowner defaults, or otherwise breaches a rental contract, businesses may still repossess the fixture and pursue other repayment means, even legal action.[13]