The Ontario Government passed the Homeowner Protection Act (HPA) on June 6, 2024.
The main change introduced by this Act is a ban on the registration of Notices of Security Interest (NOSI) for consumer goods installed as fixtures such as Furnaces, Water Heaters and Air Conditioners. Previously, a NOSI could be registered against a homeowner’s property as collateral for consumer goods but with the passing of the HPA, any NOSI’s that existed before the Act’s commencement are deemed to have expired.
However, the debt of the financiers of consumer goods is not canceled despite the fact that the NOSI is no longer on title.
The NOSI’s allowed financiers to wait until a sale or refinancing of the property to enforce their interest. Without the NOSI’s on title, financiers will have to take a more proactive approach to enforcement.
Enforcement may be done through starting an action for their debts, obtaining judgments and registering writs on title or a seizure and sale pursuant to the PPSA. Accordingly, it is very important for financiers of these consumer goods to make sure that their interests are registered under the PPSA.
It will be interesting to monitor how financiers will choose to enforce the underlying debt of these consumer goods without the NOSI on title moving forward.
If you have any question about how the passing of the HPA affects you then feel free to give us a call to learn more.
Ariel Dorfman, Associate Lawyer