(Ontario Real Estate Source)
By Brian Madigan LL.B.
If you are a Landlord you may expect from time to time to have to engage in some form of battle with your tenants. But what about the secured lenders?
In commercial premises, the tenant may have acquired some of the chattels by financing them. Most of the time, the lender will take something as security. And, they may take that major purchase.
Landlords often think that anything attached to the real property is theirs. They think that it is a fixture. Not so! The ordinary rules related to the law of attachment do not apply, if there has been some sort of security registered against the item under the Personal Property Security Act (PPSA). However, it all depends on the timing.
If the security is registered before the item is affixed; it will remain as a chattel.
If the security is registered after the chattel has been affixed; then it's too late. It's already a fixture, and has become part of the Landlord's property.
Naturally, this will effect re-financings and the sale of businesses.
Landlords should pay strict attention to what items the tenant is bringing on site. It can delay enforcement proceedings substantially. And, don't forget, secured parties being banks and other financial institutions have lots of money to litigate.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
