Does a Business Own or Lease Its Equipment? Checking in British Columbia

When you value a business, the equipment list in the sale documents is only a claim. Trucks, machinery, tools and inventory may be owned outright, financed, or subject to a lender's security. What the seller says is not the same as what the records show.

This article explains how buyers in British Columbia generally check ownership, what a search result can tell you, and how a lender's claim can be dealt with at closing. A lawyer or accountant can confirm how this applies to your deal.

This article covers the law of British Columbia.

Why owned, leased and financed equipment are different

Owned equipment with no debt against it is the simplest case. Financed equipment may be owned by the seller but be collateral for a loan, which means a lender may have a claim on it. Leased equipment may belong to the lessor, so it may not be something the seller can sell you at all.

For your valuation, the difference affects what you are really paying for, what must be paid out at closing, and what you must replace or keep paying for after you take over.

Searching the Personal Property Registry

The BC Personal Property Registry (PPR) records security agreements under the Personal Property Security Act, commercial liens under the Commercial Liens Act, and buyers' interests in goods left with the seller under the Sale of Goods Act. A person may request a name search, a serial-number search, a registration-number search or copies of registered documents.

You can search in person at a Service BC location, through a third-party service provider (who may charge extra), or by mailing BC Registry Services the search type and criteria with a $10 cheque or money order payable to the Minister of Finance. Mailed requests get results by return mail only. Direct online access is limited to professionals with a premium account and is not available to the general public, so a buyer usually searches through Service BC, a mailed request, or a lawyer or search agent.

A government-staff search costs $10, and a combined PPR and Manufactured Home search costs $15. Online searches are priced separately for clients at $7 plus a possible $1.50 operator fee, but because direct online access is limited to professionals with a premium account, a buyer will usually not use that route themselves.

• Search the seller's legal name, and any other business or trade names it uses.
• Search by serial number for vehicles and major machinery.
• Ask for copies of the registered documents behind any registration.
• Compare every registration with the equipment list in the sale documents.

Reading the results

Check the expiry or term shown in the result. Registrations for security agreements and commercial liens run for 1 to 25 years at $5 per year, or for an infinite term at $500, so an old registration may still be live.

A registration may also be filed before the security agreement is made, so a search can show a lender's claim that is not yet fully in use. Priority between perfected security interests in the same collateral is generally decided by order of registration, possession or perfection, which is why a prior lender's registration against business equipment, inventory or receivables can rank ahead of a buyer's claim.

Two exceptions matter. A purchase money security interest, which secures all or part of the purchase price of the collateral, can have priority over other security interests and may be perfected within 15 days after the debtor obtains possession, so a recent equipment-financing lender may rank first. Separately, a buyer of goods sold in the ordinary course of the seller's business takes free of a security interest unless the buyer knows the sale breaches the security agreement, but this protects customers buying inventory, not a purchaser of the whole business or its assets.

Other searches that fill the gaps

A PPR search alone does not reveal every lien, because builders' liens, family maintenance liens and some other liens are filed with other agencies. Depending on the business, you may want to add the searches below.

A Land Title Office title search costs $11.06 as at April 1, 2026, and searches through an LTSA account carry a separate electronic transaction fee of $3.55 ($2.20 for prepaid accounts), plus GST. A regular title search may miss a builders' lien submitted for registration the same day but not yet registered, so lenders and buyers' lawyers often order a separate after-3:00 p.m. search.

The federal Bankruptcy and Insolvency Records Search covers bankruptcies and proposals registered in Canada since 1978 and receiverships registered since January 1993, with a minimum fee of $8 per search. Corporate searches on a BC company produce a company summary and Notice of Articles showing current directors, and corporate search is being moved to the new BC Registry application. On the PST side, a buyer is told to obtain a PST clearance certificate before buying a business, and without one the buyer is liable for an amount equal to any outstanding amount owed by the seller.

Clearing financing and what to do next

If a search shows a lender's registration against equipment you are buying, the usual solution is a discharge or amendment at closing. A debtor or any person with an interest in property within the collateral description may give a written demand that a secured party amend or discharge a registration, and the secured party must register a financing change statement within 40 days. No fee may be charged for complying unless previously agreed. Because of that timing, it helps to raise this early rather than at the last minute.

• Ask the seller for a full asset list showing which items are owned, financed or leased.
• Request copies of every loan, lease and financing agreement.
• Run PPR searches and match each registration to an item on the list.
• Add land, bankruptcy, corporate and PST checks where they apply to the business.
• Have your lawyer require discharges or payouts for any lender's claim as a condition of closing.
• Search again close to closing, since new registrations can appear.

Frequently asked questions