Notice of security interest on your title for a furnace or water heater: Ontario rules

A notice of security interest (NOSI) is a registration on a property's title that tells the world a business claims an interest in a fixture in the home, such as a furnace, air conditioner or water heater supplied under a rental, lease or financing contract. In Ontario, NOSIs for these consumer goods were widely used and often surfaced only when owners tried to sell or refinance, holding up closings until a payout was made. Ontario's Homeowner Protection Act, 2024, which became law on 6 June 2024, banned registering NOSIs for consumer goods and deemed existing consumer NOSIs expired, so the land is no longer affected by them. The ban does not cancel your contract or erase the business's underlying security interest, and businesses can still go to court and may in some cases repossess the fixture.

This guide is part of HVAC problems and official sources. It summarises the Government of Ontario's explanation; it is not legal advice.

What changed in Ontario

Before the Homeowner Protection Act, 2024	After
Businesses could register a NOSI on title for a rented or financed furnace, AC or water heater	Registering a NOSI for consumer goods is prohibited
A NOSI could delay a sale or refinancing until the business was paid	Existing consumer NOSIs are deemed expired; the land is not affected even if the NOSI still appears on title documents
Owners sometimes paid large "discharge" amounts under pressure	The contract still stands; the business can pursue remedies in court and may sometimes repossess the fixture
Commercial NOSIs	Not affected by the ban

"Consumer goods" means goods used primarily for personal, family or household purposes; the Ontario government gives water heaters, air conditioning equipment and furnaces as examples.

Do you need to remove an old NOSI?

According to the Ontario government, no immediate action is required, because the land is not affected. Removal is optional and is usually handled by a lawyer during a sale or refinancing, by filing an application to amend the register with the fee and a law statement confirming the NOSI relates to a consumer good. The Land Registry Office then reviews it and deletes it from title.

The government also warns about companies offering, for a fee, to remove NOSIs that homeowners do not need to remove. Report such approaches to the police or the Canadian Anti-Fraud Centre.

Worked example: an old NOSI at closing

Illustrative scenario: an Ontario homeowner is selling. The buyer's lawyer finds a NOSI registered years ago by a company that rented the home's furnace and air conditioner.

Because it is a consumer NOSI, it is deemed expired and does not affect the land. The seller's lawyer can apply to delete it from title as part of the sale, typically for the registration fee plus legal time.
The rental contract still exists. The seller asks the rental company for the buy-out amount, say $3,400, or for transfer of the rental to the buyer.
The buyer can choose to take over the rental, or the seller can buy out the equipment so it is sold with the house. That is a negotiation, not a title problem.

Before 2024 the same NOSI might have been used to demand a much larger payout to "clear title" before closing.

If you are signing a new contract today

Read whether the contract creates a security interest in the equipment; even without a NOSI on title, the business may register under the Personal Property Security Act against you personally, depending on the contract.
Look for clauses about what happens on sale of the home: transfer to the buyer, buy-out or early termination fees.
Ask for the buy-out schedule in the contract.
If a seller says a lien on your house is "standard", walk away and check the Ontario rules.

Compare the total cost of renting with buying in the rental contracts guide. If the contract was signed at your door uninvited, the door-to-door ban may make it void.

Outside Ontario

Other provinces have land titles systems and personal property security registries with their own rules on fixtures. In Quebec, security over movable property is registered in the Register of Personal and Movable Real Rights (RDPRM), and leases and instalment sales of certain goods can be published there. If a registration appears in a title or registry search, ask a real estate lawyer or a notary in Quebec.

Construction liens are different

A NOSI is not a construction lien. If an HVAC contractor or a supplier is not paid for an installation, provincial lien laws (such as Ontario's Construction Act) may allow them to register a lien against the property, subject to strict deadlines. Owners in several provinces protect themselves with holdbacks on payments. Ask your lawyer how your province's lien act applies to a large HVAC job, and pay only against a written contract and invoices.

Checklist

Search your title (through a lawyer, or ServiceOntario's land registry services) if you are unsure whether an old NOSI exists.
Do not pay a third party to remove a consumer NOSI without understanding the official process.
Keep the rental contract and buy-out letters with your house documents.
Tell your real estate agent early if any equipment is rented.

FAQ

Does the ban mean I no longer owe the rental company?

No. The contract still applies. The ban affects the registration on title, not the debt.

Can the company repossess my furnace?

The Ontario government says businesses can pursue remedies in court and in some cases may repossess the fixture. Get legal advice if you receive a repossession notice.

Are commercial NOSIs affected?

No. The ban applies to consumer goods only.

Sources

Government of Ontario — Homeowner Protection Act and notices of security interest
ServiceOntario — land registration services
Law Society of Ontario — Law Society Referral Service
Canadian Anti-Fraud Centre — reporting NOSI removal scams
Registre des droits personnels et réels mobiliers (Quebec) — movable security registrations in Quebec