In Canada, Government databases that maintain public records showing security interests in personal property (chattels) for lenders, sellers, repairers, taxing authorities, government agencies, purchasers and the general public, are known as Personal Property Security Registries (PPSR). They are governed by Provincial Statutes known as Personal Property Security Acts (PPSA) and nine out of the ten provinces as well as the two of the three territories have enacted Personal Property Security Acts based roughly on Article 9 of the Uniform Commercial Code of the United States. It is expected that Nunavut will follow in the near future. (They currently use the Act from the North West Territories) In addition, the Civil Code of Quebec has recently been revised so as to provide a system of general application for taking security interests in moveable property, thus bringing that province's system closer to the mainstream of North American developments in this area of the law. You can view each provincial statute by clicking on the "Legislation Link" button on our website.
The PPSR system records and reproduces information concerning consumer and business loans where goods and other personal property are used as collateral to secure loans. Lenders and borrowers enter into what are called "security agreements." For example, a person buys a car and borrows money from a bank to pay for it. The borrower and the bank enter into a security agreement giving the bank rights to the car if the borrower does not repay the loan. The lender registers a "notice" of the agreement in the PPSR system. This is done by completing and submitting a document called a "financing statement" to the PPSA office in the jurisdiction in which the security agreement was executed. Since the financing statement is a notice, only essential information relating to the loan is required. In the case of a consumer car loan this would include: the borrower's name, address and date of birth, the lender's name and business address, the registration period, classification of the collateral as either serial or general or both, initial amount of the loan, maturity date and description of the collateral. If the collateral is a motor vehicle the data would include the motor vehicle identification number (VIN). The VIN is a 17 digit identification number affixed to the vehicle by the manufacturer and is usually located on the dashboard of the vehicle. The VIN should be obtained directly from the vehicle as the VIN set out on the vehicle permit may be incorrect. If there is any difference between the two numbers, a search should be done against both. The information is then recorded by the PPSA office, usually electronically and is available for searching by potential lenders and buyers.
Before buying a used car or other used goods, consumers should do a Personal Property Security Act (PPSA) search to protect themselves financially. For example, a search may indicate that the seller or a previous owner has obtained a loan and that the lender may have rights in a used car that a consumer intends to buy. If so, the search results will enable the consumer to contact the lender to confirm whether or not the loan is still in effect, and to obtain further details. If the loan has been repaid, the buyer should insist that the seller require the lender to promptly register a discharge before the sale is completed. However, if there is an outstanding loan, the consumer may either decide against completing the sale or require the seller to arrange for payment of the loan as well as registration of a discharge. If a lender has rights in the used car and a search is not done, the car could later be seized if the borrower fails to repay the loan. (Note: a search is not required when buying a new car or other new goods from the dealer.
In The United States, these security interest registrations are governed by one Legislative Code called the Uniform Commercial Code (UCC).