Agents and brokers urged to protect homeowners from expired property title notices
Mortgage professionals are being alerted by the Financial Services Regulatory Authority of Ontario (FSRA) regarding expired Notices of Security Interest (NOSIs) that may still appear on homeowners' property titles.
These NOSIs, commonly used for consumer goods like water heaters and HVAC units, were registered to protect businesses' interests but are no longer valid due to recent legislative changes.
Under Ontario's newly passed Homeowner Protection Act, NOSIs related to consumer goods can no longer be registered in the Land Registry. FSRA is urging mortgage agents, brokers, and brokerages to ensure their clients are aware of this change and to protect them from making unnecessary payments to businesses trying to collect on expired NOSIs.
“A business may put a NOSI in place to protect its security interest in the good or equipment, and may repossess that equipment if a homeowner defaults on payment,” the regulator said in its news release. “It is a common business practice – the registration is permitted under the Personal Property Security Act – and is often inaccurately referred to as a lien.”
NOSIs were traditionally used by businesses to secure their interests in rented or financed goods installed in homes, such as furnaces or water heaters. They allowed companies to repossess the equipment if a homeowner defaulted on payments.
However, many homeowners were unaware of these registrations until they attempted to sell or refinance their properties. In some cases, businesses charged excessive fees to discharge these NOSIs.
"While FSRA does not regulate land registrations, we want to help mortgage professionals protect homeowners from paying fees for notices of security interest (NOSIs) that are now expired and help them avoid unnecessary financial stress," said Antoinette Leung, head of financial institutions and mortgage brokerage conduct, market conduct at FSRA. "We expect mortgage professionals to make their clients aware of expired NOSIs and advise their clients appropriately to prevent any further potential consumer harm."
FSRA's latest warning comes after previous reports of homeowners being victims of scams related to home improvement contracts and new liens on their properties.
Read more: Ontario considering measures against placing liens on a home
For NOSIs registered before June 6, 2024, homeowners are advised to consult with a lawyer if they wish to have the NOSI removed from the Land Titles System.
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