Notice of disposition (PPSA)

You meet this notice when a lender enforces security over a business’s equipment or inventory, and when you consider buying assets a lender has repossessed. This entry covers Ontario and British Columbia only; check the rules where you are.

What the two statutes say

• Ontario: under section 63(4) of the Personal Property Security Act, the secured party gives not less than fifteen days notice in writing to the debtor, to known owners and obligors including guarantors, and to certain other holders of interests. Section 63(7) lists cases where notice is not required.
• Ontario: section 63(5) says the notice sets out a brief description of the collateral and the amount required to satisfy the obligation. It also states that unless the amounts due are paid the collateral will be disposed of and the debtor may be liable for any deficiency.
• British Columbia: section 59(6) of its Personal Property Security Act requires notice of disposition to listed persons not less than 20 days before the disposition, and section 59(7) sets what the notice must contain. Section 59(17) lists cases where notice is not required.

What to check or ask

If you are considering repossessed assets, ask the secured party for the notice and for proof of who received it. In Ontario, section 63(9) says a disposition made in accordance with the section discharges the secured party’s security interest and, if made to a good-faith buyer for value, also discharges any subordinate security interest. Section 63(10) addresses a disposition made otherwise than in accordance with the section. See what a PPSA search is and why you need one and seizure of collateral.