How long does a PPSA registration for a vendor take-back last in Ontario?

A seller who takes back a note and registers security under Ontario’s Personal Property Security Act is not given a fixed life for that registration. The seller chooses it. That choice matters because a registration protects the seller only while it is effective. This page covers Ontario only. If the business or its assets are in another province, check that province’s Act and registry.

The seller sets the period

Under section 51 of the Act, a financing statement may be registered for a perpetual period or for the period of years set out in the financing statement. Regulation 912 says that where the collateral does not include consumer goods, the period is one year up to twenty-five years, or perpetual, which is entered as “99”. Ontario’s registry guidance says business loans may be registered for as long as 25 years or for a perpetual period.

Renewing before it ends

Section 52 allows a registration to be extended before it ceases to be effective, by registering a financing change statement. The regulation applies the same one-to-twenty-five-year or perpetual range to a renewal. If the note’s term could outrun the registration, ask your lawyer to compare the two dates and to note a renewal date. See the glossary entry on registration periods.

What a lapse does

Under section 51, a financing statement is effective only during its registration period. The Act also says that until a security interest is perfected, it is not effective against a person who represents the debtor’s creditors, including a trustee in bankruptcy, subject to the exception in section 20(3). Section 52 allows a lapsed registration to be perfected again by a new financing statement. Where a security interest becomes unperfected and is perfected again by registration, the Act treats it as continuous from first perfection, with an exception for a person who acquired rights in the collateral while it was unperfected. A lawyer can say how that applies to your note.

When the note is paid

Under section 51, a registration period ends on the earlier of the time the registration is discharged and the end of the registration period set out in the financing statement or changed by later financing change statements. Section 55 provides for a discharge by registering a financing change statement. The registration does not end by itself when the note is paid. A discharge is a separate step, covered in how to release vendor take-back security once the note is paid.