Notice: Nova Scotia PPSA Amendment
Notice respecting recent amendments to the Personal Property Security Act affecting serial number registrations:
- The Nova Scotia Personal Property Security Act and its regulations have been amended to clarify that in order for a registration to describe serial numbered goods by serial number for the purposes of the Act, the serial number must be entered in the system under the heading "Serial Numbered Collateral Information" and after the heading "Serial Number".
- The amendments are effective on March 15, 2004 and apply to registrations made on or after March 15th, 2004.
- The amendments also provide that as of June 16, 2004 the amendments will apply to active registrations already in the Personal Property Registry (PPR) before March 15, 2004.
- Further information is available by viewing the question and answers section below or contacting the ACOL Client Support Centre.
What does this change mean?
The amendments to the Personal Property Security Act and regulations are necessary because of recent case law in PEI and NS that said it was valid to enter the serial number description under the "General Collateral" heading rather than the "Serial Numbered Collateral" heading. When searching the PPR using a serial number, the system will not return a result if the serial number is registered under the general collateral field, this was not the intent of the legislation. Rather than waiting for the decision to be appealed, the governments decided to clarify the legislation and regulations on this point and Nova Scotia has given existing registrants a 3-month grace period during which they can amend any affected registrations.
What is Serial Numbered Collateral?
Some general guidelines are provided below:
- Only serial numbered goods require serial number registration, and only in certain circumstances. "Serial numbered goods" are defined as "a motor vehicle, trailer, mobile home, aircraft, boat, or outboard motor for a boat". Serial numbered goods must also be registered as to "type". Refer to section 25(2) of the Personal Property Security Act General Regulations for more details.
- A serial number registration is required for serial numbered goods that are consumer goods. "Consumer goods" are defined as "goods that are used or acquired for use primarily for personal, family or household purposes". Failure to register these by serial number means the registration is invalid.
- A serial number registration is optional for serial numbered goods that are equipment. "Equipment" means "goods that are held by a debtor other than as inventory or consumer goods." The effect of failure to register serial numbered goods that are equipment using a serial number is that while the registration is valid, it will not be effective against a purchaser or lessee of the equipment who paid value and had no actual notice of the security interest.
- Inventory is not registered by serial number. Inventory is defined as goods that are:
- held for sale or lease, or already leased out by that person,
- furnished or to be furnished under a contract of service,
- raw materials or work in progress, or
- materials used or consumed in business.
What do I have to do?
If you have registrations that should have been entered under the heading "Serial Numbered Collateral" but have been entered under the "General Collateral" heading, you can amend the registration.
How do I know if I have registrations that may be affected?
ACOL and the government of Nova Scotia have identified registrants who have made existing registrations that appear to contain serial-numbered information in the general collateral field. Those registrants so identified will be notified directly by mail. Registrants in receipt of such a notice may, if necessary, have a list prepared of registrations which appear to have serial numbers in the general collateral field. You may then check the registration on the PPR system and amend if you wish.
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