The Ontario government recently announced that it will be proposing legislation to ban notices of security interest (NOSIs) retroactively. This action is meant to strengthen consumer protections and avoid fraudulent use of NOSIs. 

But what are NOSIs, and what should consumers know about them? Below, we’ll introduce the concept of NOSIs and how they are used before explaining how the Ontario government intends to address this controversial practice and what consumers can do to protect themselves today. 

What is a NOSI? 

A NOSI is a notice registered on a property listed on the land registry system by businesses that finance or lease certain equipment attached to a property. For example, if the property contains a leased or financed HVAC unit, the provider of the HVAC unit could file an NOSI on the property. 

How Are NOSIs Created? 

NOSIs can be used when a creditor and debtor enter a security agreement for a transaction. Using the example of a leased or financed HVAC, as noted above, where a person decides to finance or lease an HVAC from a supplier, they will agree. This agreement will outline certain terms relating to the transaction, including, perhaps, that a security interest may be registered against the purchaser’s property in the form of a NOSI. 

After the parties enter into the agreement, the provider may file a NOSI in Ontario’s Personal Property Security Registration System, which tells the public that the supplier has a claim against the purchaser’s property until the purchaser fulfills their part of the bargain (i.e., the financing period or lease concludes). 

What is the Effect of a NOSI? 

If a NOSI has been registered on a purchaser’s property, it tells third parties that the provider is interested in the subject of the transaction on the purchaser’s property. 

Note that a NOSI does not give the provider an interest in the property itself (i.e., the home). However, if the purchaser defaults on their payments or other obligations to the provider, the provider then has the right to enforce the NOSI by attempting to repossess or sell the subject of the transaction to recover the money owing. 

Even if the purchaser does not default on their obligation to the provider, having an NOSI registered on your property can prevent you from selling or refinancing the property until the transaction terms are fulfilled unless you pay the NOSI in full. 

Why is the Ontario Government Concerned About NOSIs? 

While NOSIs are not necessarily problematic on their face, some providers have used NOSIs in harmful or fraudulent ways in Ontario. For example, many Ontarians have entered into consumer agreements and have yet to be made aware that a NOSI was registered on their property, while others have struggled to get a NOSI discharged from their property even after fulfilling their obligations under a consumer contract. 

What is the Ontario Government Doing About NOSIs? 

The Ontario government is proposing legislation that would ban the use of NOSIs, though it currently needs to be clarified when the legislation will be proposed and what the final effect of the legislation will be. 

However, this announcement aligns with a series of initiatives announced by the Ontario government aimed at protecting consumers, which includes the following: 

  • Clarifying and strengthening consumer protections against unfair business practices, such as price gouging and complex contracts. These changes will also give consumers the ability to rescind a contract for up to one year if they later find that an unfair practice took place. 
  • Creating specific rules relating to long-term leases for home appliances, including a 10-day cooling-off period and limits on termination costs when a purchaser decides to end a contract early. 
  • Giving timeshare purchasers the option to exit a timeshare contract after 25 years or a timeshare owner’s death. 
  • Prohibiting gift card and prepaid purchase card providers from providing expiry dates. 
  • Doubling the maximum fines for offences under the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A
  • Allowing consumers who sue a business that refuses to provide a refund under the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched.A with the right to sue for three times the original amount of the refund. 
  • Limiting when businesses can unilaterally amend contracts, renewals, and extensions. 
  • Prohibiting businesses from deterring customers from publishing online reviews. 
  • Limiting barriers that prevent consumers from cancelling subscriptions and membership-based contracts. 

To learn more about these proposed changes, learn more about the Ontario government’s proposed Better for Consumers, Better for Businesses Act

How Can Ontarians Protect Themselves Against Fraudulent or Harmful NOSIs?

As noted above, the Ontario government has not yet banned NOSIs and at this stage, there is no guarantee that NOSIs will ultimately be banned. So, what can homeowners do to protect themselves against fraudulent or harmful NOSIs? 

Below are just a few tips. 

Educate Yourself Regarding NOSIs

Understanding what NOSIs are—and how they can be used fraudulently—is an excellent step for protecting yourself against fraudulent NOSI use. At a minimum, knowing what NOSIs are and the effect their registration can have on your property goes a long way toward understanding your rights as a consumer. 

Review Your Property Title Regularly

Homeowners should review their property titles regularly to confirm any questionable or unusual registrations. If you have questions or concerns about any registrations on title to your property and their legal implications, be sure to contact an experienced real estate lawyer for clarification. 

Consider Contracts Carefully Before Signing 

Often, consumer contracts contain terms that consumers might overlook, such as a term permitting the provider to register a NOSI on title to your property until your obligations are met. Don’t allow yourself to be pressured into signing quickly—take the time to review the contract carefully and speak with a professional if you have questions or concerns about any of the terms or their implications. 

Contact A Real Estate Lawyer

Trust your instincts: if something feels off, trust your instincts and proceed with caution. If you have concerns about a contract you are considering entering or a contract you’ve already entered, contact an experienced lawyer for assistance in understanding your rights and determining the best course of action. 

Ontario consumers can better protect themselves against NOSIs and other property-related concerns by taking proactive steps. 

Experienced Real Estate Lawyers Representing Consumers and Homeowners Across Ontario 

Whether you’re a consumer, a homeowner, or both, fraudulent transactions and potential risks can wreak havoc on your well-being. At Tierney Stauffer LLP, our lawyers have decades of combined experience representing clients in various scenarios, ranging from fraudulent transactions to residential real estate law and commercial real estate law. Our goal is to provide you with timely and effective service, regardless of why you’re reaching out. 
Call us at 1-888-799-8057 or online to schedule a consultation with a team member.


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