Discharge of security

Under Ontario’s and BC’s Acts, paying a loan and discharging the registration are separate steps: once the obligations are performed, a person with an interest can demand that the secured party register the discharge. A buyer who finds an old PPSA registration on a lien search can ask for it to be discharged before or at closing. See what if there is an unresolved lien on closing day.

How the provinces differ

• Ontario, Personal Property Security Act, section 55: a registration may be discharged by registering a financing change statement
• Ontario section 56(1): once all obligations under a security agreement have been performed, any person with an interest in the collateral may deliver written notice demanding registration of a financing change statement or a certificate of discharge, and the secured party shall register it
• British Columbia, section 50: on a written demand by the debtor or a person with an interest in the property, in the cases the section lists, the secured party must register a financing change statement amending or discharging the registration within the time the section sets; failing that, the person who gave the demand may register it on proof satisfactory to the registrar that the demand was given, unless the secured party has meanwhile registered a court order maintaining the registration
• Other provinces have their own Acts and time limits

What to check

Ask for a search after the discharge is registered to confirm it appears. Confirm whether the lender also holds security that sits outside the personal property registry.