Personal Property Security Act

1 (1) In this Act, “accessions” means goods that are installed in or affixed to other goods; (“accessoires”) “account” means a monetary obligation not evidenced by chattel paper or an instrument, whether or not it has been earned by performance, but does not include investment property; (“compte”) “broker” means a broker as defined in the Securities Transfer Act, 2006; (“courtier”) “certificated security” means a certificated security as defined in the Securities Transfer Act, 2006; (“valeur mobilière avec certificat”) “chattel paper” means one or more than one record that evidences both a monetary obligation and a security interest in or a lease of specific goods; (“acte mobilier”) “clearing house” means an organization through which trades in options or standardized futures are cleared and settled; (“chambre de compensation”) “clearing house option” means an option, other than an optio…

PART I APPLICATION AND CONFLICT OF LAWS

2 Subject to subsection 4 (1), this Act applies to, (a) every transaction without regard to its form and without regard to the person who has title to the collateral that in substance creates a security interest including, without limiting the foregoing, (i) a chattel mortgage, conditional sale, equipment trust, debenture, floating charge, pledge, trust indenture or trust receipt, and (ii) an assignment, lease or consignment that secures payment or performance of an obligation; (b) a transfer of an account or chattel paper even though the transfer may not secure payment or performance of an obligation; and (c) a lease of goods under a lease for a term of more than one year even though the lease may not secure payment or performance of an obligation. R.S.O. 1990, c. P.10, s. 2; 2006, c. 34, Sched. E, s. 2. Section Amendments with date in force (d/m/y) 2006, c. 34, Sched. E, s. 2 - 01/08/2…

3 This Act applies to the Crown and every agency of the Crown. R.S.O. 1990, c. P.10, s. 3.

4 (1) Except as otherwise provided under this Act, this Act does not apply, (a) to a lien given by statute or rule of law, except as provided in subclause 20 (1) (a) (i) or section 31; (b) to a deemed trust arising under any Act, except as provided in subsection 30 (7); (c) to a transfer of an interest or claim in or under any policy of insurance or contract of annuity, other than a contract of annuity held by a securities intermediary for another person in a securities account; (d) to a transaction under the Pawnbrokers Act; Note: On a day to be named by proclamation of the Lieutenant Governor, clause 4 (1) (d) of the Act is repealed and the following substituted: (See: 2019, c. 4, Sched. 2, s. 2) (d) to a transaction between a pledgor and a person who carries on the business of taking, by way of pawn or pledge, any article for the repayment of money lent on the basis of the pawn or ple…

5 (1) Except as otherwise provided in this Act, the validity, perfection and effect of perfection or non-perfection of the following security interests shall be governed by the law of the jurisdiction where the collateral is situated at the time the security interest attaches: 1. A security interest in goods. 2. A possessory security interest in an instrument, a negotiable document of title, money or tangible chattel paper. 2019, c. 7, Sched. 49, s. 2. Perfection of security interest continued (2) A security interest in goods perfected under the law of the jurisdiction in which the goods are situated at the time the security interest attaches but before the goods are brought into Ontario continues perfected in Ontario if a financing statement is registered in Ontario before the goods are brought in or if it is perfected in Ontario, (a) within sixty days after the goods are brought in; (b…

6 (1) Subject to section 7, if the parties to a security agreement creating a security interest in goods in one jurisdiction understand at the time the security interest attaches that the goods will be kept in another jurisdiction, and the goods are removed to that other jurisdiction, for purposes other than transportation through the other jurisdiction, within thirty days after the security interest attached, the validity, perfection and effect of perfection or non-perfection of the security interest shall be governed by the law of the other jurisdiction. Perfection in province (2) If the other jurisdiction mentioned in subsection (1) is not Ontario, and the goods are later brought into Ontario, the security interest in the goods is deemed to be one to which subsection 5 (2) applies if it was perfected under the law of the jurisdiction to which the goods were removed. R.S.O. 1990, c. P.…

7 (1) The validity, the perfection, the effect of perfection or non-perfection, and the priority of the following security interests shall be governed by the law of the jurisdiction where the debtor is located at the time the security interest attaches: 1. A security interest in an intangible. 2. A security interest in goods that are of a type that are normally used in more than one jurisdiction, if the goods are equipment or inventory leased or held for lease by a debtor to others. 3. A security interest in electronic chattel paper. 4. A non-possessory security interest in an instrument, a negotiable document of title, money or tangible chattel paper. 2019, c. 7, Sched. 49, s. 3. Change of jurisdiction (2) If a security interest to which subsection (1) applies is a perfected security interest under the law of the jurisdiction where the debtor is located, and if the jurisdiction where th…

7.1 (1) The validity of a security interest in investment property shall be governed by the law, at the time the security interest attaches, (a) of the jurisdiction where the certificate is located if the collateral is a certificated security; (b) of the issuer’s jurisdiction if the collateral is an uncertificated security; (c) of the securities intermediary’s jurisdiction if the collateral is a security entitlement or a securities account; (d) of the futures intermediary’s jurisdiction if the collateral is a futures contract or a futures account. 2006, c. 8, s. 126. Same (2) Except as otherwise provided in subsection (5), perfection, the effect of perfection or of nonperfection and the priority of a security interest in investment property shall be governed by the law, (a) of the jurisdiction in which the certificate is located if the collateral is a certificated security; (b) of the is…

7.2 (1) In this section, “prior law” means the Personal Property Security Act, as it reads immediately before December 31, 2015, including the applicable law as determined under that Personal Property Security Act; (“loi antérieure”) “prior security interest” means a security interest described in subsection 7 (1) that arises under a prior security agreement. (“sûreté antérieure”) 2006, c. 34, Sched. E, s. 5; 2017, c. 20, Sched. 9, s. 10 (1). Prior security agreement (2) For the purposes of this section, a security agreement entered into before December 31, 2015 is a prior security agreement, subject to subsection (3). 2006, c. 34, Sched. E, s. 5; 2017, c. 20, Sched. 9, s. 10 (1). Same (3) If a security agreement described in subsection (2) is amended, renewed or extended by agreement entered into on or after December 31, 2015, the security agreement as amended, renewed or extended is a …

7.3 (1) In this section, “prior law” means the Personal Property Security Act, as it reads immediately before December 31, 2015, including the applicable law as determined under that Personal Property Security Act; (“loi antérieure”) “prior security interest” means a security interest in investment property that arises under a prior security agreement. (“sûreté antérieure”) 2006, c. 34, Sched. E, s. 6; 2017, c. 20, Sched. 9, s. 11 (1). Prior security agreement (2) For the purposes of this section, a security agreement entered into before December 31, 2015 is a prior security agreement, subject to subsection (3). 2006, c. 34, Sched. E, s. 6; 2017, c. 20, Sched. 9, s. 11 (1). Same (3) If a security agreement described in subsection (2) is amended, renewed or extended by agreement entered into on or after December 31, 2015, the security agreement as amended, renewed or extended is a prior s…

8 (1) Despite sections 5 to 7.3, (a) procedural issues involved in the enforcement of the rights of a secured party against collateral are governed by the law of the jurisdiction in which the enforcement rights are exercised; and (b) substantive issues involved in the enforcement of the rights of a secured party against collateral are governed by the proper law of the contract between the secured party and the debtor. 2006, c. 8, s. 127; 2006, c. 34, Sched. E, s. 7. Deemed perfection (2) For the purposes of this Part, a security interest shall be deemed to be perfected under the law of a jurisdiction if the secured party has complied with the law of the jurisdiction with respect to the creation and continuance of a security interest that is enforceable against the debtor and third parties. R.S.O. 1990, c. P.10, s. 8 (2). Section Amendments with date in force (d/m/y) 2006, c. 8, s. 127 - …

8.1 For the purposes of sections 5 to 8, a reference to the law of a jurisdiction is a reference to the internal law of that jurisdiction, excluding its conflict of law rules. 2006, c. 8, s. 128. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 128 - 01/01/2007

PART II VALIDITY OF SECURITY AGREEMENTS AND RIGHTS OF PARTIES

9 (1) Except as otherwise provided by this or any other Act, a security agreement is effective according to its terms between the parties to it and against third parties. R.S.O. 1990, c. P.10, s. 9 (1). (2), (3) Repealed: 2006, c. 34, Sched. E, s. 8. Section Amendments with date in force (d/m/y) 2006, c. 34, Sched. E, s. 8 - 01/08/2007

10 Where a security agreement is in writing, the secured party shall deliver a copy of the security agreement to the debtor within ten days after the execution thereof, and, if the secured party fails to do so after a request by the debtor, the Superior Court of Justice, on the application of the debtor, may order the delivery of such a copy to the debtor. R.S.O. 1990, c. P.10, s. 10; 2000, c. 26, Sched. B, s. 16 (1). Section Amendments with date in force (d/m/y) 2000, c. 26, Sched. B, s. 16 (1) - 06/12/2000

11 (1) A security interest is not enforceable against a third party unless it has attached. 2006, c. 8, s. 129. When security interest attaches to collateral (2) Subject to section 11.1, a security interest, including a security interest in the nature of a floating charge, attaches to collateral only when value is given, the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party and, (a) the debtor has signed a security agreement that contains, (i) a description of the collateral sufficient to enable it to be identified, or (ii) a description of collateral that is a security entitlement, securities account or futures account, if it describes the collateral by any of those terms or as investment property or if it describes the underlying financial asset or futures contract; (b) the collateral is not a certificated security and is in the po…

11.1 (1) A security interest in favour of a securities intermediary attaches to a person’s security entitlement if, (a) the person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and (b) the securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary. 2006, c. 8, s. 129. Attachment of security interest to security or other financial asset (2) A security interest in favour of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if, (a) the security or other financial asset is, (i) in the ordinary course of business transferred by delivery with any necessary endorsement or assig…

12 (1) A security agreement may cover after-acquired property. Exception (2) No security interest attaches under an after-acquired property clause in a security agreement, (a) to crops that become such more than one year after the security agreement has been executed, except that a security interest in crops that is given in conjunction with a lease, purchase or mortgage of land may, if so agreed, attach to crops to be grown on the land concerned during the term of such lease, purchase or mortgage; or (b) to consumer goods, other than accessions, unless the debtor acquires rights in them within ten days after the secured party gives value. R.S.O. 1990, c. P.10, s. 12.

13 A security agreement may secure future advances. R.S.O. 1990, c. P.10, s. 13.

14 (1) An agreement by a debtor not to assert against an assignee any claim or defence that the debtor has against the debtor’s seller or lessor is enforceable by the assignee who takes the assignment for value, in good faith and without notice, except as to such defences as may be asserted against a holder in due course of a negotiable instrument under the Bills of Exchange Act (Canada). R.S.O. 1990, c. P.10, s. 14 (1). Non-application (2) Subsection (1) does not apply to an assignment to which section 83 of the Consumer Protection Act, 2002 applies. 2002, c. 30, Sched. E, s. 14 (1). Note: On a day to be named by proclamation of the Lieutenant Governor, subsection 14 (2) of the Act is amended by striking out “section 83 of the Consumer Protection Act, 2002” and substituting “section 46 of the Consumer Protection Act, 2023”. (See: 2023, c. 23, Sched. 1, s. 116 (1)) Section Amendments wit…

15 Where a seller retains a purchase-money security interest in goods, (a) the law relating to the contract of sale governs the sale and any disclaimer, limitation or modification of the seller's conditions and warranties; and (b) except as provided in section 14, the conditions and warranties in a sale agreement shall not be affected by any security agreement. R.S.O. 1990, c. P.10, s. 15; 2000, c. 26, Sched. B, s. 16 (2). Section Amendments with date in force (d/m/y) 2000, c. 26, Sched. B, s. 16 (2) - 06/12/2000

16 Where a security agreement provides that the secured party may accelerate payment or performance if the secured party considers that the collateral is in jeopardy or that the secured party is insecure, the agreement shall be construed to mean that the secured party may accelerate payment or performance only if the secured party in good faith believes and has commercially reasonable grounds to believe that the prospect of payment or performance is or is about to be impaired or that the collateral is or is about to be placed in jeopardy. R.S.O. 1990, c. P.10, s. 16.

17 (1) A secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession, and, unless otherwise agreed, in the case of an instrument or chattel paper, reasonable care includes taking necessary steps to preserve rights against prior parties. R.S.O. 1990, c. P.10, s. 17 (1). Same, rights and duties of secured party (2) Unless otherwise agreed, where collateral is in the secured party’s possession, (a) reasonable expenses, including the cost of insurance and payment of taxes and other charges incurred in obtaining and maintaining possession of the collateral and in its preservation, are chargeable to the debtor and are secured by the collateral; (b) the risk of loss or damage, except where caused by the negligence of the secured party, is on the debtor to the extent of any deficiency in any insurance coverage; (c) the secured party may…

17.1 (1) Unless otherwise agreed by the parties and despite section 17, a secured party having control under subsection 1 (2) of investment property as collateral, (a) may hold as additional security any proceeds received from the collateral; (b) shall either apply money or funds received from the collateral to reduce the secured obligation or remit such money or funds to the debtor; and (c) may create a security interest in the collateral. 2006, c. 8, s. 130. Same (2) Despite subsection (1) and section 17, a secured party having control under subsection 1 (2) of investment property as collateral may sell, transfer, use or otherwise deal with the collateral in the manner and to the extent provided in the security agreement. 2006, c. 8, s. 130. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 130 - 01/01/2007

18 (1) A person who is a debtor or judgment creditor or who has an interest in the collateral or who is the authorized representative of such a person, by a notice in writing given to the secured party and containing an address for reply, may require the secured party to furnish to the person any one or more of, (a) a statement in writing of the amount of the indebtedness and the terms of payment thereof as of the date specified in the notice; (b) a statement in writing approving or correcting as of the date specified in the notice a statement of the collateral or a part thereof as specified in a list attached to the notice; (c) a statement in writing approving or correcting as of the date specified in the notice a statement of the amount of the indebtedness and of the terms of payment thereof; (d) a true copy of the security agreement; or (e) sufficient information as to the location of…

PART III PERFECTION AND PRIORITIES

19 A security interest is perfected when, (a) it has attached; and (b) all steps required for perfection under any provision of this Act have been completed,

regardless of the order of occurrence. R.S.O. 1990, c. P.10, s. 19. Perfection of security interest

19.1 (1) Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account. 2006, c. 8, s. 131. Futures account (2) Perfection of a security interest in a futures account also perfects a security interest in the futures contracts carried in the futures account. 2006, c. 8, s. 131. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 131 - 01/01/2007

19.2 (1) A security interest arising in the delivery of a financial asset under subsection 11.1 (2) is perfected when it attaches. 2006, c. 8, s. 131. Same (2) A security interest in investment property created by a broker or securities intermediary is perfected when it attaches. 2006, c. 8, s. 131. Same (3) A security interest in a futures contract or a futures account created by a futures intermediary is perfected when it attaches. 2006, c. 8, s. 131. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 131 - 01/01/2007

20 (1) Except as provided in subsection (3), until perfected, a security interest, (a) in collateral is subordinate to the interest of, (i) a person who has a perfected security interest in the same collateral or who has a lien given under any other Act or by a rule of law or who has a priority under any other Act, or (ii) a person who causes the collateral to be seized through execution, attachment, garnishment, charging order, equitable execution or other legal process, or (iii) all persons entitled by the Creditors’ Relief Act, 2010 or otherwise to participate in the distribution of the property over which a person described in subclause (ii) has caused seizure of the collateral, or the proceeds of such property; (b) in collateral is not effective against a person who represents the creditors of the debtor, including an assignee for the benefit of creditors and a trustee in bankruptcy…

21 (1) If a security interest is originally perfected in any way permitted under this Act and is again perfected in some way under this Act without an intermediate period when it was unperfected, the security interest shall be deemed to be perfected continuously for the purposes of this Act. Assignees (2) An assignee of a security interest succeeds in so far as its perfection is concerned to the position of the assignor at the time of the assignment. R.S.O. 1990, c. P.10, s. 21. Perfection

22 (1) Possession or repossession of the collateral by the secured party, or on the secured party’s behalf by a person other than the debtor or the debtor’s agent, perfects a security interest in, (a) tangible chattel paper; (b) goods; (c) instruments; (d) negotiable documents of title; and (e) money,

but only while it is actually held as collateral. 2006, c. 8, s. 133; 2019, c. 7, Sched. 49, s. 5. By delivery (2) A secured party may perfect a security interest in a certificated security by taking delivery of the certificated security under section 68 of the Securities Transfer Act, 2006. 2006, c. 8, s. 133. Same (3) A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under section 68 of the Securities Transfer Act, 2006 and remains perfected by delivery until the debtor obtains possession of the security certificate. 2006, c. 8, s. 133. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 133 - 01/01/2007 2019, c. 7, Sched. 49, s. 5 - 15/05/2020

22.1 (1) A security interest in investment property may be perfected by control of the collateral under subsection 1 (2). 2006, c. 8, s. 134. Same (2) A security interest in investment property is perfected by control under subsection 1 (2) from the time the secured party obtains control and remains perfected by control until, (a) the secured party does not have control; and (b) one of the following occurs: (i) if the collateral is a certificated security, the debtor has or acquires possession of the security certificate, (ii) if the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner, or (iii) if the collateral is a security entitlement, the debtor is or becomes the entitlement holder. 2006, c. 8, s. 134. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 134 - 01/01/2007

22.2 (1) A security interest in electronic chattel paper may be perfected by control of the collateral under subsection 1 (3). 2019, c. 7, Sched. 49, s. 6. Same (2) A security interest in electronic chattel paper is perfected by control only when the secured party has control of it under subsection 1 (3). 2019, c. 7, Sched. 49, s. 6. Section Amendments with date in force (d/m/y) 2019, c. 7, Sched. 49, s. 6 - 15/05/2020

23 Registration perfects a security interest in any type of collateral. R.S.O. 1990, c. P.10, s. 23.

24 (1) Repealed: 2006, c. 8, s. 135 (1). Same (2) A security interest perfected by possession in, (a) an instrument or a certificated security that a secured party delivers to the debtor for, (i) ultimate sale or exchange, (ii) presentation, collection or renewal, or (iii) registration of transfer; or (b) a negotiable document of title or goods held by a bailee that are not covered by a negotiable document of title, which document of title or goods the secured party makes available to the debtor for the purpose of, (i) ultimate sale or exchange, (ii) loading, unloading, storing, shipping or trans-shipping, or (iii) manufacturing, processing, packaging or otherwise dealing with goods in a manner preliminary to their sale or exchange, remains perfected for the first ten days after the collateral comes under the control of the debtor. R.S.O. 1990, c. P.10, s. 24 (2); 2006, c. 8, s. 135 (2).…

25 (1) Where collateral gives rise to proceeds, the security interest therein, (a) continues as to the collateral, unless the secured party expressly or impliedly authorized the dealing with the collateral free of the security interest; and (b) extends to the proceeds. R.S.O. 1990, c. P.10, s. 25 (1); 2000, c. 26, Sched. B, s. 16 (3). Same (2) Where the security interest was perfected by registration when the proceeds arose, the security interest in the proceeds remains continuously perfected so long as the registration remains effective or, where the security interest is perfected with respect to the proceeds by any other method permitted under this Act, for so long as the conditions of such perfection are satisfied. R.S.O. 1990, c. P.10, s. 25 (2). Same (3) A security interest in proceeds is a continuously perfected security interest if the interest in the collateral was perfected when…

26 (1) A security interest in goods in the possession of a bailee who has issued a negotiable document of title covering them is perfected by perfecting a security interest in the document, and any security interest in them otherwise perfected while they are so covered is subject thereto. Same (2) A security interest in collateral in the possession of a person, other than the debtor, the debtor’s agent or a bailee mentioned in subsection (1), is perfected by, (a) issuance of a document of title in the name of the secured party; (b) possession on behalf of the secured party; or (c) registration. R.S.O. 1990, c. P.10, s. 26.

27 (1) Where a debtor sells or leases goods that are subject to a security interest, the security interest in the goods reattaches to the goods, if, (a) the buyer or lessee has taken free of the security interest under clause 25 (1) (a) or subsection 28 (1) or (2); (b) the goods are returned to or repossessed by the debtor; and (c) the obligation secured remains unpaid or unperformed. Same (2) Where a security interest in goods reattaches under subsection (1), then any question as to, (a) whether or not the security interest in the goods is perfected; and (b) the time of its perfection or registration, shall be determined as if the goods had not been sold or leased. Where sale or lease creates an account or chattel paper (3) If a sale or lease of goods creates an account or chattel paper and, (a) the account or chattel paper is transferred to a secured party; and (b) the goods are return…

28 (1) A buyer of goods from a seller who sells the goods in the ordinary course of business takes them free from any security interest therein given by the seller even though it is perfected and the buyer knows of it, unless the buyer also knew that the sale constituted a breach of the security agreement. R.S.O. 1990, c. P.10, s. 28 (1). Same (1.1) Subsection (1) applies whether or not, (a) the buyer took possession of the goods; (b) the seller was in possession of the goods at any time; (c) title to the goods passed to the buyer; or (d) the seller took a security interest in the goods. 2006, c. 34, Sched. E, s. 9. Same (1.2) Despite subsection (1.1), subsection (1) does not apply if the goods were not identified to the contract of sale. 2006, c. 34, Sched. E, s. 9. Goods identified to contract (1.3) For the purposes of subsection (1.2), goods are identified to the contract of sale when…

28.1 (1) This Act does not limit the rights that a protected purchaser of a security has under the Securities Transfer Act, 2006. 2006, c. 8, s. 137. Same (2) The interest of a protected purchaser of a security under the Securities Transfer Act, 2006 takes priority over an earlier security interest, even if perfected, to the extent provided in that Act. 2006, c. 8, s. 137. Same (3) This Act does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under the Securities Transfer Act, 2006. 2006, c. 8, s. 137. Section Amendments with date in force (d/m/y) 2006, c. 8, s. 137 - 01/01/2007

29 The rights of a person who is, (a) a holder in due course of a bill, note or cheque within the meaning of the Bills of Exchange Act (Canada); or (b) a transferee from the debtor of money,

are to be determined without regard to this Act. R.S.O. 1990, c. P.10, s. 29.

30 (1) If no other provision of this Act is applicable, the following priority rules apply to security interests in the same collateral: 1. Where priority is to be determined between security interests perfected by registration, priority shall be determined by the order of registration regardless of the order of perfection. 2. Where priority is to be determined between a security interest perfected by registration and a security interest perfected otherwise than by registration, i. the security interest perfected by registration has priority over the other security interest if the registration occurred before the perfection of the other security interest, and ii. the security interest perfected otherwise than by registration has priority over the other security interest, if the security interest perfected otherwise than by registration was perfected before the registration of a financing…

30.1 (1) The rules in this section govern priority among conflicting security interests in the same investment property. 2006, c. 8, s. 138. Secured party with control (2) A security interest of a secured party having control of investment property under subsection 1 (2) has priority over a security interest of a secured party that does not have control of the investment property. 2006, c. 8, s. 138. Certificated security perfected by delivery (3) A security interest in a certificated security in registered form which is perfected by taking delivery under subsection 22 (2) and not by control under section 22.1 has priority over a conflicting security interest perfected by a method other than control. 2006, c. 8, s. 138. Rank by priority in time (4) Except as otherwise provided in subsections (5) and (6), conflicting security interests of secured parties each of which has control under su…

31 Where a person in the ordinary course of business furnishes materials or services with respect to goods that are subject to a security interest, any lien that the person has in respect of the materials or services has priority over a perfected security interest unless the lien is given by an Act that provides that the lien does not have such priority. R.S.O. 1990, c. P.10, s. 31.

32 (1) A perfected security interest in crops or their proceeds, given not more than six months before the crops become growing crops by planting or otherwise, to enable the debtor to produce the crops during the production season, has priority over an earlier perfected security interest in the same collateral to the extent that the earlier interest secures obligations that were due more than six months before the crops become growing crops by planting or otherwise even though the person giving value has notice of the earlier security interest. Same (2) Where more than one perfected security interest is given priority by subsection (1), each ranks equally according to the ratio that the amount advanced with respect to each bears to the total amount advanced. R.S.O. 1990, c. P.10, s. 32.

33 (1) A purchase-money security interest in inventory or its proceeds has priority over any other security interest in the same collateral given by the same debtor, if, (a) the purchase-money security interest was perfected at the time, (i) the debtor obtained possession of the inventory, or (ii) a third party, at the request of the debtor, obtained or held possession of the inventory, whichever is earlier; (b) before the debtor receives possession of the inventory, the purchase-money secured party gives notice in writing to every other secured party who has, before the date of registration by the purchase-money secured party, registered a financing statement that describes the collateral as, or as including, (i) items or types of inventory, all or some of which are the same as the items or types of inventory that will be subject to the purchase money security interest, (ii) inventory, …

34 (1) A security interest in goods that attached, (a) before the goods became a fixture, has priority as to the fixture over the claim of any person who has an interest in the real property; or (b) after the goods became a fixture, has priority as to the fixture over the claim of any person who subsequently acquired an interest in the real property, but not over any person who had a registered interest in the real property at the time the security interest in the goods attached and who has not consented in writing to the security interest or disclaimed an interest in the fixture. Exceptions (2) A security interest mentioned in subsection (1) is subordinate to the interest of, (a) a subsequent purchaser for value of an interest in the real property; or (b) a creditor with a prior encumbrance of record on the real property to the extent that the creditor makes subsequent advances, if the …

35 (1) Subject to subsections (2) and (3) of this section and section 37, a security interest in goods that attached, (a) before the goods became an accession, has priority as to the accession over the claim of any person in respect of the whole; and (b) after the goods became an accession, has priority as to the accession over the claim of any person who subsequently acquired an interest in the whole, but not over the claim of any person who had an interest in the whole at the date the security interest attached to the accession and who has not consented in writing to the security interest in the accession or disclaimed an interest in the accession as part of the whole. R.S.O. 1990, c. P.10, s. 35 (1). Exceptions (2) A security interest referred to in subsection (1), (a) is subordinate to the interest of, (i) a subsequent buyer of an interest in the whole, and (ii) a creditor with a pri…

36 (1) A security interest in a right to payment under a lease of real property, to which this Act applies, is subordinate to the interest of a person who acquires for value the lessor’s interest in the lease or in the real property thereby demised if the interest, or notice thereof, of the person is registered in the proper land registry office before the interest, or notice thereof, of the secured party is registered in the proper land registry office. Mortgages (2) A security interest in a right to payment under a mortgage or charge of real property, to which this Act applies, is subordinate to the interest of a person who acquires for value the mortgagee’s or chargee’s interest in the mortgage or charge if the interest of the person is registered in the proper land registry office before a notice of the security interest is registered in the proper land registry office. R.S.O. 1990, …

37 A perfected security interest in goods that subsequently become part of a product or mass continues in the product or mass if the goods are so manufactured, processed, assembled or commingled that their identity is lost in the product or mass, and, if more than one security interest attaches to the product or mass, the security interests rank equally according to the ratio that the cost of the goods to which each interest originally attached bears to the cost of the total product or mass. R.S.O. 1990, c. P.10, s. 37.

38 A secured party may, in the security agreement or otherwise, subordinate the secured party’s security interest to any other security interest and such subordination is effective according to its terms. R.S.O. 1990, c. P.10, s. 38.

39 The rights of a debtor in collateral may be transferred voluntarily or involuntarily despite a provision in the security agreement prohibiting transfer or declaring a transfer to be a default, but no transfer prejudices the rights of the secured party under the security agreement or otherwise. R.S.O. 1990, c. P.10, s. 39.

40 (1) In this section, “account debtor” means a person obligated on an account or on chattel paper. 2006, c. 34, Sched. E, s. 11 (1). Defences available against assignee (1.1) An account debtor who has not made an enforceable agreement not to assert defences arising out of the contract between the account debtor and the assignor may set up by way of defence against the assignee, (a) all defences available to the account debtor against the assignor arising out of the terms of the contract or a related contract, including equitable set-off and misrepresentation; and (b) the right to set off any debt owing to the account debtor by the assignor that was payable to the account debtor before the account debtor received notice of the assignment. 2006, c. 34, Sched. E, s. 11 (1). Payment by account debtor (2) An account debtor may pay the assignor until the account debtor receives notice, reaso…

PART IV REGISTRATION

41 (1) A registration system, including a central office, shall be maintained for the purposes of this Act and any other Act that provides for registration in the registration system. 2000, c. 26, Sched. B, s. 16 (5); 2006, c. 34, Sched. E, s. 12 (1). Central office (2) The central office of the registration system shall be located at or near the City of Toronto. R.S.O. 1990, c. P.10, s. 41 (2); 2017, c. 2, Sched. 12, s. 7 (1). (3) Repealed: 2006, c. 34, Sched. E, s. 12 (2). Section Amendments with date in force (d/m/y) 2000, c. 26, Sched. B, s. 16 (5) - 06/12/2000 2006, c. 34, Sched. E, s. 12 (1, 2) - 01/08/2007 2012, c. 8, Sched. 45, s. 2 (1, 2) - See: Table of Public Statute Provisions Repealed Under Section 10.1 of the Legislation Act, 2006 - 31/12/2022 2017, c. 2, Sched. 12, s. 7 (1) - 22/03/2017

42 (1) There shall be a registrar of personal property security. R.S.O. 1990, c. P.10, s. 42 (1); 2006, c. 34, Sched. E, s. 13 (1). Registrar (2) The registrar shall be the public servant employed under Part III of the Public Service of Ontario Act, 2006 who is designated as registrar by the Minister. R.S.O. 1990, c. P.10, s. 42 (2); 2001, c. 9, Sched. D, s. 13; 2006, c. 35, Sched. C, s. 108 (1); 2024, c. 18, Sched. 4, s. 3 (1). (3) Repealed: 2006, c. 34, Sched. E, s. 13 (2). Seal of office (4) The registrar shall have a seal of office in such form as the Lieutenant Governor in Council may by order approve. R.S.O. 1990, c. P.10, s. 42 (4). Protection from personal liability (5) No action or other proceeding for damages shall be instituted against the registrar or any person employed in the Ministry for any act done in good faith in the execution or intended execution of the person’s duty…

42.1 Section Amendments with date in force (d/m/y) 2012, c. 8, Sched. 45, s. 4 - See: Table of Public Statute Provisions Repealed Under Section 10.1 of the Legislation Act, 2006 - 31/12/2022

43 (1) Upon the request of any person for a search of the individual debtor name index, business debtor name index or motor vehicle identification number index and upon payment of the required fee, the registrar shall issue a certificate stating, (a) whether, at the time mentioned in the certificate, there is registered a financing statement or a financing change statement the registration of which is recorded in the central file of the registration system in which the name or number with respect to which the inquiry is made is shown in the designated place on the financing statement or financing change statement as a debtor or as a motor vehicle identification number, as the case may be, and, if there is, the registration number of it and any other recorded information; (b) whether, at the time mentioned in the certificate, there is entered in the central file of the registration system…

43.1 (1) The registrar shall issue a used vehicle information package in respect of any used motor vehicle to any person who applies therefor and pays the required fee. 1993, c. 13, s. 2; 1998, c. 18, Sched. E, s. 195. Definitions (2) In this section, “used motor vehicle” and “used vehicle information package” have the same meaning as in section 11.1 of the Highway Traffic Act. Abbreviated certificate (3) The registrar may issue an abbreviated certificate under section 43 for the purposes of a used vehicle information package and the abbreviated certificate confers all the rights and liabilities that apply in respect of certificates under section 43. 1993, c. 13, s. 2. Section Amendments with date in force (d/m/y) 1993, c. 13, s. 2 - 04/10/1993; 1998, c. 18, Sched. E, s. 195 - 18/12/1998

44 (1) The account in the Consolidated Revenue Fund known as “The Personal Property Security Assurance Fund” is hereby continued under the name The Personal Property Security Assurance Fund in English and Caisse d’assurance des sûretés mobilières in French. R.S.O. 1990, c. P.10, s. 44 (1). Same (2) The prescribed portion of the fees received under this Act shall be paid into the Assurance Fund. R.S.O. 1990, c. P.10, s. 44 (2). Same (3) Interest shall be credited to the Assurance Fund out of the Consolidated Revenue Fund at a rate to be determined from time to time by the Lieutenant Governor in Council, and such interest shall be made up at the close of each fiscal year upon the balance in the Assurance Fund at the end of the previous calendar year. R.S.O. 1990, c. P.10, s. 44 (3). Entitlement to payment (4) Any person who suffers loss or damage as a result of the person’s reliance upon a…

45 (1) In order to perfect a security interest by registration under this Act, a financing statement shall be registered. R.S.O. 1990, c. P.10, s. 45 (1). Consumer goods (2) Where the collateral is consumer goods, the financing statement referred to in subsection (1) shall not be registered before the security agreement is signed by the debtor and, where a financing statement is registered in contravention of this subsection, the registration of the financing statement does not constitute registration or perfection under this Act. R.S.O. 1990, c. P.10, s. 45 (2). Collateral other than consumer goods (3) Where the collateral is not consumer goods, the financing statement referred to in subsection (1) may be registered before or after the security agreement is signed by the debtor. R.S.O. 1990, c. P.10, s. 45 (3). Subsequent security agreements (4) Except where the collateral is consumer g…

46 (1) A financing statement or financing change statement that is to be registered shall contain the required information presented in a required format. 2006, c. 34, Sched. E, s. 15 (1). Electronic transmission (2) A financing statement or financing change statement in a required format may be tendered for registration by direct electronic transmission to the registration system’s database. 2006, c. 34, Sched. E, s. 15 (1). Classification of collateral (2.1) Except with respect to rights to proceeds, where a financing statement or financing change statement sets out a classification of collateral and also contains words that appear to limit the scope of the classification, then, unless otherwise indicated in the financing statement or financing change statement, the secured party may claim a security interest perfected by registration only in the class as limited. 2010, c. 16, Sched. 5…

46.1 (1) For the purposes of subsection 46 (4), in the case of a financing statement or financing change statement in respect of collateral that is or includes a motor vehicle, as defined in the regulations, a reasonable person shall be deemed not likely to be misled materially, insofar as the security interest in the motor vehicle is concerned, by the fact that the statement has one or more errors or omissions described in subsection (2) of this section, if, (a) the motor vehicle’s vehicle identification number is set out correctly in the designated place on the statement; (b) the statement sets out at least the name of one debtor and, if the debtor is a natural person, his or her date of birth; and (c) the statement otherwise substantially complies with the requirements that apply for the purposes of subsection 46 (1). 2017, c. 20, Sched. 9, s. 12. Errors or omissions to which subs. (1…

46.2 For the purposes of subsection 46 (4), in the case of a financing statement or financing change statement in respect of collateral that is or includes a motor vehicle, as defined in the regulations, a reasonable person shall be deemed likely to be misled materially, insofar as the security interest in the motor vehicle is concerned, by any one or more of the following errors or omissions in the statement: 1. In the case where the motor vehicle is classified as consumer goods on the statement, i. a vehicle identification number for the motor vehicle is not set out on the statement, ii. a vehicle identification number for the motor vehicle is set out on the statement but not in the designated place, or iii. a vehicle identification number for the motor vehicle is set out on the statement but is incorrect. 2. In the case where the motor vehicle is classified as equipment or inventory o…

46.3 Nothing in sections 46.1 and 46.2 affects the application of subsection 46 (4) in circumstances not described in sections 46.1 and 46.2. 2017, c. 20, Sched. 9, s. 12. Section Amendments with date in force (d/m/y) 2017, c. 20, Sched. 9, s. 12 - 14/11/2017

47 (1) A financing change statement may be registered where a security interest is perfected by registration and the secured party has assigned the secured party’s interest in all or part of the collateral. Same (2) Where a security interest has not been perfected by registration and the secured party has assigned the secured party’s interest, a financing statement referred to in section 46 may be registered, (a) naming the assignor as the secured party and subsection (1) applies; or (b) naming the assignee as the secured party and subsection (1) does not apply. Same (3) Upon the registration of the financing change statement under subsection (1) or the financing statement under subsection (2), the assignee becomes a secured party of record. R.S.O. 1990, c. P.10, s. 47.

48 (1) Where a security interest is perfected by registration and the debtor, with the prior consent of the secured party, transfers the debtor’s interest in all or part of the collateral, the security interest in the collateral transferred becomes unperfected fifteen days after the transfer is made unless the secured party registers a financing change statement within such fifteen days. Same (2) Where a security interest is perfected by registration and the debtor, without the prior consent of the secured party, transfers the debtor’s interest in all or part of the collateral, the security interest in the collateral transferred becomes unperfected thirty days after the later of, (a) the transfer, if the secured party had prior knowledge of the transfer and if the secured party had, at the time of the transfer, the information required to register a financing change statement; and (b) th…

49 A financing change statement may be registered at any time during the registration period of a financing statement, (a) to correct an error or omission in the registered financing statement or any financing change statement related thereto; or (b) to amend the registered financing statement or any financing change statement related thereto where the amendment is not otherwise provided for in this Part. R.S.O. 1990, c. P.10, s. 49.

50 Where a security interest is perfected by registration and the interest of the secured party has been subordinated by the secured party to any other security interest in the collateral, a financing change statement may be registered at any time during the period that the registration of the subordinated interest is effective. R.S.O. 1990, c. P.10, s. 50.

51 (1) A financing statement may be registered for a perpetual period or for such period of years as is set out in the financing statement. R.S.O. 1990, c. P.10, s. 51 (1). Change of registration period (2) The registration period of a financing statement may be reduced by the registration of a financing change statement under section 49 or extended by the registration of a financing change statement under subsection 52 (1). R.S.O. 1990, c. P.10, s. 51 (2). Duration of registration period (3) The registration period for a financing statement begins with the time assigned to its registration by the registrar or branch registrar and ends on the earlier of, (a) the time the registration is discharged; or (b) at the end of the registration period as set out in the financing statement or as changed by subsequent financing change statements. R.S.O. 1990, c. P.10, s. 51 (3). Effective period (4…

52 (1) Where a security interest has been perfected by registration, the registration may be extended before the registration ceases to be effective by the registration of a financing change statement. Reperfection (2) Where a security interest has been perfected by registration and the registration has ceased to be effective, the security interest may be perfected again by the registration of a financing statement. R.S.O. 1990, c. P.10, s. 52.

53 The registration of a financing change statement is effective from the time assigned to its registration by the registrar and is effective so long as the registration of the financing statement to which it relates is effective. R.S.O. 1990, c. P.10, s. 53; 2006, c. 34, Sched. E, s. 17. Section Amendments with date in force (d/m/y) 2006, c. 34, Sched. E, s. 17 - 01/08/2007

54 (1) A notice of security interest, in the required form, may be registered in the proper land registry office, where, (a) the collateral is or includes fixtures or goods that may become fixtures or crops, or minerals or hydrocarbons to be extracted, or timber to be cut, subject to subsection (1.1); or (b) the security interest is a security interest in a right to payment under a lease, mortgage or charge of real property to which this Act applies. R.S.O. 1990, c. P.10, s. 54 (1); 1998, c. 18, Sched. E, s. 198 (1); 2024, c. 18, Sched. 4, s. 4 (1). Non-application to consumer goods (1.1) Clause (1) (a) does not apply with respect to collateral that is consumer goods, except as may be provided by the regulations. 2024, c. 18, Sched. 4, s. 4 (2). Consumer goods, registration period (2) Where the collateral is consumer goods that is prescribed for the purposes of subsection (1.1), a notice…

55 A registration may be discharged or partially discharged by the registration of a financing change statement discharging or partially discharging the registration. R.S.O. 1990, c. P.10, s. 55. Discharge or amendment

56 (1) Where a financing statement or notice of security interest is registered under this Act, and, (a) all the obligations under a security agreement to which it relates have been performed; or (b) it is agreed to release part of the collateral covered by a security agreement to which it relates upon payment or performance of certain of the obligations under the security agreement, then upon payment or performance of such obligations, any person having an interest in the collateral covered by the security agreement may deliver a written notice to the secured party demanding registration of a financing change statement referred to in section 55 or a certificate of discharge or partial discharge referred to in subsection 54 (4), or both, and the secured party shall register the financing change statement or the certificate of discharge or partial discharge, or both, as the case may be. R…

57 (1) Within thirty days after all the obligations under a security agreement that creates a security interest in consumer goods have been performed or forgiven, the secured party shall register, (a) a financing change statement discharging the registration if the security interest has been perfected by registration; and (b) a certificate of discharge, if the consumer goods are prescribed for the purposes of subsection 54 (1.1) and a notice of security interest has been registered under that section. R.S.O. 1990, c. P.10, s. 57 (1); 2024, c. 18, Sched. 4, s. 6 (1). Transition (1.1) Clause (1) (b), as it read immediately before the day the Homeowner Protection Act, 2024 received Royal Assent, continues to apply with respect to a notice of security interest registered under section 54 with respect to consumer goods before that day, if all the obligations under a security agreement that cr…

PART V DEFAULT — RIGHTS AND REMEDIES

57.1 Unless otherwise provided in this Part, this Part applies to a security interest only if it secures payment or performance of an obligation. 2006, c. 34, Sched. E, s. 19. Section Amendments with date in force (d/m/y) 2006, c. 34, Sched. E, s. 19 - 01/08/2007

58 The rights and remedies mentioned in this Part are cumulative. R.S.O. 1990, c. P.10, s. 58.

59 (1) Where the debtor is in default under a security agreement, the secured party has the rights and remedies provided in the security agreement and the rights and remedies provided in this Part and, when in possession or control of the collateral, the rights, remedies and duties provided in section 17 or 17.1, as the case may be. 2006, c. 8, s. 140 (1). Enforcement by secured party (2) The secured party may enforce a security interest by any method permitted by law and, if the collateral is or includes documents of title, the secured party may proceed either as to the documents of title or as to the goods covered thereby, and any method of enforcement that is permitted with respect to the documents of title is also permitted, with necessary modifications, with respect to the goods covered thereby. R.S.O. 1990, c. P.10, s. 59 (2). Rights and remedies of debtor (3) Where the debtor is i…

60 (1) Nothing in this Act prevents, (a) the parties to a security agreement from agreeing that the secured party may appoint a receiver or receiver and manager and, except as provided by this Act, determining the rights and duties of the receiver or receiver and manager by agreement; or (b) a court of competent jurisdiction from appointing a receiver or receiver and manager and determining rights and duties of the receiver or receiver and manager by order. R.S.O. 1990, c. P.10, s. 60 (1). Same (2) Upon application of the secured party, the debtor or any other person with an interest in the collateral, and after notice to any other person that the court directs, the Superior Court of Justice, with respect to a receiver or receiver and manager however appointed, may, (a) remove, replace or discharge the receiver or receiver and manager; (b) give directions on any matter relating to the du…

61 (1) Where so agreed and in any event upon default under a security agreement, a secured party is entitled, (a) to notify any person obligated on an account or on chattel paper or any obligor on an instrument to make payment to the secured party whether or not the assignor was theretofore making collections on the collateral; and (b) to take control of any proceeds to which the secured party is entitled under section 25. Same (2) A secured party who by agreement is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor and who undertakes to collect from a person obligated on an account or on chattel paper or an obligor on an instrument shall proceed in a commercially reasonable manner and the secured party may deduct the reasonable expenses of realization from the collections. R.S.O. 1990, c. P.10, s. 61.

62 (1) Upon default under a security agreement, (a) the secured party has, unless otherwise agreed, the right to take possession of the collateral by any method permitted by law; (b) if the collateral is equipment and the security interest has been perfected by registration, the secured party may, in a reasonable manner, render such equipment unusable without removal thereof from the debtor’s premises, and the secured party shall thereupon be deemed to have taken possession of such equipment; and (c) the secured party may dispose of collateral on the debtor’s premises in accordance with section 63. R.S.O. 1990, c. P.10, s. 62. Exempt collateral (2) If any of the collateral in which the secured party has a security interest under the security agreement, other than a purchase-money security interest or a possessory security interest, is property that would be exempt under the Execution Act…

63 (1) Upon default under a security agreement, the secured party may dispose of any of the collateral in its condition either before or after any commercially reasonable repair, processing or preparation for disposition, and the proceeds of the disposition shall be applied consecutively to, (a) the reasonable expenses of the secured party, including the cost of insurance and payment of taxes and other charges incurred in retaking, holding, repairing, processing and preparing for disposition and disposing of the collateral and, to the extent provided for in the security agreement, any other reasonable expenses incurred by the secured party; and (b) the satisfaction of the obligation secured by the security interest of the party making the disposition, and the surplus, if any, shall be dealt with in accordance with section 64. R.S.O. 1990, c. P.10, s. 63 (1). Methods of disposition (2) Co…