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Saturday, February 06, 2016
Saskatchewan Justice

The Personal Property Security Act, 1993 allows lenders and sellers to secure payment of a debt and to establish priority over other creditors by registering their security interest in the personal property of a debtor. For example, when a bank loans someone money to purchase a car, it may want to register its security interest in the car at the Personal Property Registry (PPR). Generally, priority is determined by date of registration in the PPR.

The Act provides a public and searchable registry system known as the Personal Property Registry. Security agreements or interests may be registered in the registry. Registration serves as a public notice that a security interest exists against the collateral, e.g., a debtor's car or farm tractor. In other words, a security interest is a legal document between a creditor and a debtor that guarantees the debtor will repay his or her debt to the creditor or risk losing the collateral.

Each Canadian personal property registry system is computerized and all registrations are effected at a single central registry within each province. Each time a security interest is registered at the PPR the general public is deemed to know of its existence. On-line, telephone or facsimile searches can be made using the debtor's name or the serial number of the goods used as collateral.

Once registered, the security interest is enforceable against third parties. If a third party purchases property that has a security interest registered against it, the third party is deemed to be aware of the security interest -- they take the property subject to that security interest. In other words, the creditor who has a registered security can force the third party to repay the debt or risk losing the property.

When a debtor defaults on a security agreement, the security agreement generally provides that the creditor can take possession of the collateral or otherwise enforce the security agreement by any method permitted by law.

When the obligations of the agreement are complete, the security interest is discharged and the registration removed from the PPR register.

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