Crystallization of a floating charge

Under British Columbia’s Land Title Act, a floating charge secures the payment or performance of an obligation, and the event that fixes it on specific land is the one stipulated in the instrument that created it. A borrower or buyer can ask what that event is and whether it has happened.

British Columbia’s definition

The Land Title Act describes a crystallized floating charge as a charge that has fixed on specific land in accordance with the applicable law and the terms of the instrument. It makes the personal property registry the proper office for registering an uncrystallized floating charge. An application to register a crystallized charge in a land title office must be accompanied by a signed statement, satisfactory to the registrar, that the charge has crystallized and of the circumstances in which it did. The Act adds that registration does not mean the registrar has determined that crystallization occurred.

In the PPSAs

The Personal Property Security Acts of British Columbia and Ontario each refer to a security interest in the nature of a floating charge. This entry covers British Columbia and Ontario only; check the rules in the province where the business is.

• What event does the lender’s document say fixes the charge?
• Has any such event happened?
• Does the security cover land, and where is it registered?

See what happens if I default on an acquisition loan and seizure of collateral.