- Ontario law draws a basic line between real property (land and anything permanently attached to it, like buildings) and personal property (everything else a business owns or uses —…
- When a business (or its owner personally) pledges land or a building as collateral, the lender registers its interest against the title to that specific property in the land registration…
- When a lender takes security over a business's equipment, inventory, receivables, or similar movable assets, it registers under the PPSA — generally against the business's correct legal…
A single business loan can touch two completely different legal systems without the borrower ever realizing it. If your business owns the building it operates from, and also has equipment, inventory, and receivables, a lender financing your business may need to secure its interest in both — and Ontario handles each through an entirely separate registration regime.
Understanding which system covers which asset matters whether you're borrowing, buying a business, or just trying to make sense of the paperwork your lender is asking you to sign.
Two Kinds of Property, Two Kinds of Registration
Ontario law draws a basic line between real property (land and anything permanently attached to it, like buildings) and personal property (everything else a business owns or uses — equipment, inventory, vehicles, receivables, and similar assets).
- Real property is secured and tracked through Ontario's land registration system, where a lender's mortgage or charge is registered directly against the title to a specific parcel of land.
- Personal property is secured and tracked through the Personal Property Security Act ("PPSA") registry, where a lender's security interest is generally registered against the borrower's name, covering categories of movable business assets rather than a single parcel of land.
These are not overlapping or interchangeable systems — a registration in one tells you nothing about the other.
How a Lender Secures Real Property
When a business (or its owner personally) pledges land or a building as collateral, the lender registers its interest against the title to that specific property in the land registration system. Anyone searching the title to that parcel — a future buyer, another lender, a lawyer doing due diligence — can see the registered charge and understand the property is encumbered.
This registration is tied to the specific piece of land. It says nothing about whether the business's equipment or inventory is also pledged somewhere else.
How a Lender Secures Personal Property
When a lender takes security over a business's equipment, inventory, receivables, or similar movable assets, it registers under the PPSA — generally against the business's correct legal name, sometimes with additional identifying detail for certain asset types such as vehicles. A search of the PPSA registry against the business's name reveals what personal property security interests exist, but says nothing about whether the business's land is mortgaged.
Comparing the Two Systems
| Land Registration System | PPSA Registry | |
|---|---|---|
| What it covers | Real property (land, buildings) | Personal property (equipment, inventory, receivables, vehicles, etc.) |
| What you register against | A specific parcel of land (by title/PIN) | The debtor's legal name (plus serial number for certain goods) |
| What a search reveals | Charges/mortgages against that specific property | Security interests registered against that name |
| Typical instrument | Mortgage or charge | Security agreement (general or purchase-money) |
| Who typically searches it | Real estate lawyers, title insurers, buyers of land | Commercial lenders, buyers of business assets, other creditors |
Why a Single Business Loan Often Touches Both Systems
A common scenario: a business owner takes out a term loan secured by both the commercial building the business operates from and a general security agreement over the business's equipment, inventory, and receivables. To properly protect its loan, the lender needs to register in both systems — a mortgage or charge against the building's title, and a PPSA registration against the business's name for everything else.
Skipping either step leaves a real gap. A lender with only a PPSA registration has no claim against the land itself if things go wrong; a lender with only a mortgage on the building has no registered claim to the equipment or inventory inside it.
Frequently asked questions
If my business's building is mortgaged, does that also cover my equipment and inventory?
No. A mortgage or charge registered against land generally does not extend to personal property like equipment or inventory. A lender wanting security over both needs separate registrations in each system.
Do I need to search both systems before buying a business or its assets?
Generally, yes, if real property is involved. If you're only buying specific equipment or inventory, a PPSA search may be sufficient; if real estate is part of the deal, a title search in the land registration system is also essential. Your lawyer can confirm what's needed for your specific transaction.
If a lender has security in both systems, which one gets paid first if the business defaults?
It depends on what's actually being sold or enforced against. The land registration system governs priority among claims against the land itself; the PPSA governs priority among claims against personal property. They generally don't compete against each other because they attach to different types of assets.
Does incorporating as a numbered company change which system applies?
No. The choice between real property and personal property registration turns on the type of asset being secured, not on how the business is structured or named. A numbered corporation's building still goes through the land registration system, and its equipment still goes through the PPSA registry.
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