Consultation on Issues Related to Notices of Security Interest (NOSIs)
Bill or Act:
Summary of Proposal:
A NOSI is a tool that businesses can use to ensure their priority to remove their financed or leased equipment from a property in certain circumstances. By registering a NOSI on the land registration system, a business effectively notifies a purchaser or mortgagee of the business' interest in the fixture and can avoid any surprises or disputes over interests in the fixtures on the property.
However, the ministry is aware that some consumers are adversely affected by having a NOSI on title, the effect of which usually arises when they try to sell their home or access additional financing.
In many cases, consumers are not aware that a NOSI has been registered on title to their home until they are in the midst of a home sale or mortgage refinancing, with tight timelines adding to the high pressure to resolve the situation expeditiously. Whether selling or refinancing a home, the discharge of a NOSI is usually required for the transaction to proceed, unless, in the case of a sale, the purchaser agrees to assume the contract (e.g., lease for the fixture). In those cases, the sale would move forward and the NOSI would stay on title.
Where the discharge of a NOSI is required to discharge the NOSI in order to complete the sale or refinancing of the property, certain suppliers use the discharge of the NOSI as leverage and unfairly pressure the consumer to negotiate a buyout of the contract in its entirety, including services, and not just for the value of the equipment. This can result in exorbitant payouts.
The ministry has developed a consultation paper, which sets out explanations of topics being considered to address the issues relating to NOSIs, as well as probing questions. The ministry is seeking feedback from stakeholders, including consumers, businesses, law enforcement, and legal experts, on the current challenges and opportunities related to NOSIs, and to identify potential solutions that could enhance consumer protection and promote a fair and competitive economy.
The ministry welcomes responses to the questions in this paper and any additional comments or suggestions related to NOSIs.
Please include feedback and responses in the text boxes provided throughout the document. There is no word limit on any responses. Please provide examples or evidence to support your suggestions, where possible.
You may submit comments by December 1, 2023 directly through this Regulatory Registry page or download this paper and submit your completed responses by mail to:
Manager, Business Law and Burden Reduction Unit
Ministry of Public and Business Service Delivery
56 Wellesley Street West - 6th Floor
Toronto, ON, M7A 1C1
Please provide your name and contact information, including an email address.
Thank you for taking the time to review the paper. If you have any questions about this consultation, please email firstname.lastname@example.org.
Analysis of Regulatory Impact:
The government is committed to supporting consumers and to engage with stakeholders to collaborate on potential solutions to address the issues caused by the misuse of NOSIs.
Specific burdens will be identified after the consultation process if proposals are developed and put forward.
Please note that unless agreed otherwise by the Ministry of Public and Business Service Delivery, all submissions received from organizations in response to this consultation will be considered public information and may be used, disclosed, and published by the ministry to help the ministry in evaluating and revising its proposal. This may involve releasing any response received to other interested parties. The ministry will consider an individual showing an affiliation with an organization to have given their response on behalf of that organization.
Responses from individuals who do not show an affiliation with an organization will not be considered public information. The ministry may use and disclose responses from individuals to help evaluate and revise the proposal. The ministry may also publish responses received from individuals. Should the ministry use, disclose, or publish individual responses, the ministry will not disclose any personal information such as an individual's name and contact details without the individual's prior consent, unless required by law. The ministry may use your provided contact information to follow up with you to clarify your responses.
The collection of this information is authorized pursuant to the ministry's responsibility for the Consumer Protection Act, 2002 and the Personal Property Security Act. Please note that the ministry is subject to the Freedom of Information and Protection of Privacy Act (FIPPA) and may disclose the information you or your organization provides in accordance with FIPPA.
If you have any questions about the collection of this information, please contact the ministry by email - email@example.com.
October 17, 2023
Comments Due Date:
December 1, 2023
Ministry of Public and Business Service Delivery
56 Wellesley St. W. - 6th floor