Big Changes for Ontario Homeowners: What You Need to Know About NOSIs

Source: This summary is based on information provided by Close My Home, a law firm offering insights into the new NOSI legislation in Ontario. For the full article and more details, visit Close My Home.

In June 2024, the Ontario government introduced the Homeowner Protection Act, which significantly impacts Notice of Security Interest (NOSI) registrations on real estate titles. This change is crucial for homeowners, potential buyers, and anyone involved in property transactions in Ontario. Here’s what you need to know about how this affects your property rights, especially when it comes to consumer goods.

What is a NOSI?

A Notice of Security Interest (NOSI) is a claim or "lien" that allows creditors to secure their interest in rented items—often major appliances like water heaters or air conditioners—by placing it on the title of a home. Previously, NOSIs could alert potential buyers and other interested parties that these items were not fully owned by the seller.

Key Changes Under the Homeowner Protection Act 2024

1. No More NOSIs for Consumer Goods:

   • As of June 6, 2024, creditors can no longer register NOSIs for consumer goods (e.g., HVAC equipment, water softeners) on real estate titles. Registered NOSIs on consumer goods before this date are now considered expired and can be removed with assistance from a lawyer, although legal fees may apply.

2. Consumers Still Have Financial Responsibility:

   • Importantly, removing a NOSI from the property title doesn’t cancel the rental contract. Homeowners are still liable for payments. Creditors may take alternative measures, such as reporting defaults to credit bureaus, which can impact consumers’ credit scores.

3. New Registrations and Exceptions:

   • NOSIs for items outside the definition of "consumer goods" under the Personal Property Security Act can still be registered, but they now require confirmation from a lawyer.

What This Means for Homeowners and Buyers

For homeowners, the new law creates a more transparent process, allowing them to remove outdated NOSIs and reduce complications during property sales. Buyers will no longer inherit hidden financial liabilities on consumer goods tied to the property.

Final Thoughts

These changes represent a shift towards a more consumer-friendly real estate market in Ontario. For a smooth and secure transaction, consult with your real estate lawyer on any NOSIs that may apply to your property.