Ontario’s Homeowner Protection Act (HPA) took effect on June 6, 2024. It changes how certain notices can appear on a home’s title and removes a common source of last-minute surprises in mortgage deals.
If you arrange mortgages or fund them, this matters because these notices used to slow down closings, create borrower stress, and sometimes push homeowners into paying fees they didn’t truly need to pay just to keep a transaction alive.
The big change
Before June 6, 2024, some companies that rented or financed home equipment—like water heaters, furnaces, and A/C units—would register a notice on the homeowner’s property title. That notice is called a Notice of Security Interest (NOSI).
Now, under the HPA, these notices can’t be registered on title for consumer household equipment.
In other words: equipment providers can’t use the land title system to pressure homeowners over ordinary household items.
Why NOSIs caused problems in mortgage transactions
Most homeowners didn’t even know a NOSI existed until they tried to sell or refinance. A NOSI isn’t the same thing as a mortgage, but in practice it often created the same type of panic:
- title searches would reveal the notice late in the process
- lenders wanted comfort that the title was “clean”
- lawyers had to figure out what the notice meant and how to remove it
- borrowers felt forced to pay large “buyout” amounts immediately
Even when the company couldn’t take the home, the timing pressure was real. In a refinance, that pressure can be even worse because borrowers may be counting on funds to consolidate debt or meet urgent expenses.
What changed for older NOSIs already on title
The HPA doesn’t only apply going forward. It also helps deal with NOSIs that were registered before June 6, 2024 for household consumer items.
The practical takeaway is:
- some older NOSIs that should never have been on title in the first place are now treated as ineffective, and
- there are processes to have those notices removed without the homeowner having to negotiate with the company that registered them.
Your borrower’s real estate lawyer is the right person to confirm whether a NOSI is disqualified and to handle the removal steps through the Land Registry process.
What this means for mortgage agents and brokers
This change reduces one kind of closing problem—but it creates a new risk: people may assume that if the notice is gone (or removable), the debt is gone too.
That’s not always true.
So your best practice is to focus on two separate issues:
- Title issue: Is there a notice on title that affects closing? (Often easier now for household items.)
- Contract issue: Does the borrower still owe money under a rental/lease/financing contract? (Still possible.)
Practical steps you can build into your process
- Ask early if the property has rented/financed equipment (water heater, HVAC, water treatment).
- Get the paperwork early: contract, account statements, buyout terms.
- If the borrower is being pressured with “you can’t close unless you pay,” encourage them to speak with their lawyer to confirm what’s actually required.
- Keep clear notes in the file—especially if a borrower is deciding whether to pay, dispute, or remove a notice.
What this means for lenders and underwriters
Lenders should see fewer last-minute title surprises caused by household equipment NOSIs. But lenders and lawyers are still cautious for a reason:
No notice on title doesn’t guarantee there’s no equipment debt.
This is why some transactions now involve:
- more detailed questions about rental items
- requests for proof of ownership or buyout confirmation
- PPSA searches (searches for security interests registered against the person/company name, not the land)
This can feel like “more paperwork,” but it’s often about preventing a borrower from inheriting a messy equipment dispute after closing.
A common misconception to avoid: “If it’s not on title, it doesn’t matter.”
This is the biggest trap.
Even if equipment companies can’t use NOSIs on title anymore for consumer goods, borrowers can still face:
- collections activity under the contract
- credit reporting disputes
- claims about returning equipment or paying a buyout
- conflicts after a purchase when a buyer didn’t realize an item was rented
So while the HPA reduces title leverage, it doesn’t eliminate the need for good disclosure and good diligence.
What you can tell clients
Here’s a simple way to explain it to a borrower:
- “This new law makes it harder for equipment companies to put notices on your home’s title for things like water heaters.”
- “But if you signed a contract, you may still owe money under that contract.”
- “Your lawyer can confirm whether anything on title is removable and what we actually need to do to close.”
That messaging helps clients stay calm while still taking the issue seriously.
Quick checklist for mortgage files
Use this as a practical closing tool:
- Confirm if any household equipment is rented/financed.
- Collect contracts and buyout/ownership terms.
- Flag any equipment disputes early (before commitment / funding).
- If a NOSI is found or claimed, send it to borrower’s counsel to confirm whether it’s disqualified and removable.
- Don’t assume “pay it off” is the only solution—especially if the notice is no longer effective.
Bottom line
The HPA is a positive change for Ontario mortgage transactions. It should reduce last-minute title issues tied to water heaters, HVAC rentals, and similar household equipment. But mortgage professionals still need to manage the underlying contract risk by asking the right questions early and making sure borrowers get proper legal advice when a notice or demand letter appears.
Disclaimer: This article is for general information only and is not legal advice. Legal advice depends on the facts of your situation. If you have questions about a NOSI, a title issue, or an equipment contract, speak to an Ontario lawyer.