Perfection of a security interest

A lender can have a signed security agreement and still be unperfected. A buyer or new lender can search the public record for registrations, one route to perfection. Start with the PPSA search, then ask what each registration shows.

How the statutes frame it

Ontario’s s. 19 treats a security interest as perfected when it has attached and all steps required for perfection under the Act have been completed, regardless of the order of occurrence. Registration of a financing statement is one route; the Act also provides for perfection by possession and, for some collateral, by control. Under s. 20(1), until perfected a security interest is subordinate to certain other interests and not effective against a trustee in bankruptcy, subject to s. 20(3). BC’s Act separately provides that registration perfects, subject to its s. 19.

What to ask

• Which method perfected each claim: registration, possession or another route
• Whether the lender’s registration is current or has lapsed
• Whether Quebec assets are involved; the Civil Code of Québec speaks of publication of rights, not PPSA perfection