Personal Property Registry provides valuable protection

The Personal Property Registry is a public, centralized, computerized system containing registrations related to security interests, such as liens, on personal property.

The PPR is designed to provide users with a simple and reliable means to search for and register interests against personal property.

The purpose of registering an interest in the PPR is two-fold. First, by registering an interest, the registering party gives public disclosure of its interest in property.

The policy underlying this aspect of the PPR is the protection of third parties who might be deceived by a person who is in possession of property that either does not belong to them or is subject to an interest.

The second reason for registration is to maintain priority to a debtor’s property vis-à-vis others.

The general rule when there are competing interests in the same property can be summarized as “first in time, first in right.” In other words, the first party to affect registration in the PPR has first priority to be paid subject to certain types of interests that are accorded greater priority.

The following scenario demonstrates a situation when registration would be effected in the PPR.

The bank lends Albert money to buy a new truck. Albert now owes a debt to the bank. To protect its right to repayment, the bank registers its interest in the PPR using Albert’s first and last name, as well as the truck’s serial number as the registration criterion.

By registering in the PPR, the bank publicly discloses its interest to third parties and protects its priority position vis-à-vis subsequent registrations made against Albert or his truck.

The other major service provided by the PPR is the ability to search for registrations either made against individuals or specific items of property that are categorized as “serial-numbered” in nature.

The ability to search the PPR by name and serial number is equally important.

A correct search of the PPR using the first and last name of an individual will disclose registrations made against that name.

In some cases, a search will indicate that no registrations have been made against that name.

In others, the search may indicate that a registration has been made against that name.

The registration might be made pursuant to a security agreement, a judgment entered against that individual, a commercial lien, or other types of legal interest.

However, a registration system that uses only an individual’s name as the registration-search criterion has a fundamental weakness — it does not give protection to a third party who is not in the position to obtain a search of the PPR based on a name because the existence or identity of that person is unknown. This is particularly relevant when the property involved is valuable, highly mobile, and susceptible to passing between multiple parties via private sale (motor vehicles, trailers, boats, snowmobiles). This is the problem that serial numbered registration is intended to eliminate, or at least reduce.

The ability to search the PPR by serial number can prevent you from incurring someone else’s debt.

As an example, if you buy a used vehicle via private sale without searching the PPR, you might later discover that someone else has an interest in that vehicle for which debt is due and could be attempting to seize it.

Fortunately, this scenario can be prevented by conducting a serial number search before purchasing a used vehicle.

The search results will disclose any interest registered against that vehicle. If there are registrations against the vehicle, then you have avoided unknowingly incurring someone else’s debt.

If there are no registrations shown in the search results, then you can be assured that the vehicle is free of any registered interests.

It is important to note that the PPR only discloses interests in personal property; it does not provide information related to ownership.

This means that while you can search the PPR to determine whether a vehicle has any interests registered against it, you cannot use the search results to determine who the legal owner of that vehicle is.

In Saskatchewan, there are other methods that can be used to determine who the legal owner of a vehicle is.

Furthermore, if you are concerned that a vehicle or other serial-numbered item may be stolen, you can conduct a search in the Canadian Police Information Centre database. The database is free to use and allows the public to determine if serial-numbered property has been reported stolen in Canada.

Derek Gianoli is a lawyer with Stevenson Hood Thornton Beaubier LLP in Saskatoon. He can be contacted at dgianoli@shtb-law.com. This article is provided for general informational purposes only and does not constitute legal or other professional advice and does not replace independent legal or tax advice.

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