Amanda is a Real Estate and Wills Lawyer at Merovitz Potechin LLP. Drawing on her experience in small-town general practice, Amanda continues to offer flexible legal services, bringing a client-focused approach to every case. She is passionate about providing start-to-finish client care, ensuring personalized attention and practical solutions for each client’s unique needs.
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NOSI Changes in Ontario: What Homeowners and Lawyers Need to Know One Year Later
Category: Real Estate Law,
Last year the province rolled out changes to how Notices of Security Interest (NOSI) are registered on title and improved a homeowner’s ability to remove invalid notices from title.
See our article here for more information about this change.
One year later, lawyers and homeowners are now acclimatizing to these new procedures and here are some important things to know:
New Due Diligence
Vendors and purchasers alike can now feel confident that a NOSI will not delay closing as before, but now Lawyers must conduct PPSA searches to ensure that there are no ancillary interests that may create a lien on title.
Lawyers on both sides of transactions now have new procedures they must implement to maintain professional standards.
It is not yet clear whether the new PPSA requisitions are valid requisitions on title which would be strong enough to stop a transaction if not properly addressed. We need more case law on homes sold after these changes to fully understand how ending NOSIs for consumer goods affects real estate transactions.
Impact on Vendors
Vendors will still need to pay any loans or financing debts related to items like furnaces, A/Cs and Water heaters. These items are not on title, but purchaser’s lawyers are still looking for them to prevent surprises for their clients.
Vendors still need to provide contract information to purchasers and may find purchasers negotiating for payment or removal of these contracts or loans at earlier stages of a purchase, even in the Agreement of Purchase and Sale.
PPSA searches go beyond household items. Searches in this archive list all sorts of property such as vehicles, boats, RVs, leased equipment, and even employment contracts. This means that your lawyer might receive requests for information about property that is unrelated to your sale but requires a response. Patience and responsiveness will help the transaction close smoothly.
Impact on Purchasers
New searches mean new disbursements. The government regulates PPSA search costs, and your lawyer can explain the process in detail.
Just because there is no registration on title does not mean that the furnace is free from debt. If you hope to save some costs by refusing to do these searches, you could end up in a costly legal battle with the leasing company in the future. While the vendor should provide information about any rental items in the home, it will be you and your lawyer’s responsibility to do your homework on the property.
The changes are still very new, but what is clear is that we cannot ignore rental and lease contracts for household goods simply because they do not show up on Title Search.
Homeowners, purchasers, and lawyers have been quick to adapt so far, and overall, the change appears to have had a positive impact on residential transactions. NOSIs may still pop up from time to time as the invalid notices are removed from title.
How We Can Help
If you suspect that you have a NOSI on title or would like to know how rental equipment will affect your purchase or sale, our experienced Real Estate Group is ready to help you.
The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.
