Have you heard of NOSI? If you’re in the world of real estate financing or exploring mortgage options in Canada, understanding NOSI is crucial. NOSI, short for Notice of Security Interest, plays a significant role in securing loans and mortgages. Let’s dive into the world of NOSI and unravel its importance.

What Exactly is a NOSI?

A ‘NOSI’ stands for Notices of Security Interest, and it is a mechanism for other creditors to notify you that they have a higher priority interest in specific house fixtures. If a homeowner discovers that one of their fixtures is financed, they ought to seriously consider refinancing to install an OWNED unit or buy out their leasing agreement. Recognize that a fixture in a house could have a competing priority claim made by another creditor.

Put another way, you might not be aware that your house has a lien on it! The interest that accrues on the NOSI frequently exceeds the value of the item or items you are renting by a large margin. 

How Does NOSI Work?

When a lender provides a loan that is secured by a property, they register an NOSI with the relevant land registry office. This NOSI serves as a public record of the lender’s interest in the property. It is important to note that a NOSI does not transfer ownership of the property to the lender; rather, it gives the lender the right to take possession of the property if the borrower defaults on the loan.

For homeowners, having an NOSI registered against their property means that they have taken out a loan that is secured by the property. This could be a mortgage, a home equity line of credit (HELOC), or another type of secured loan. Homeowners need to be aware of any NOSIs registered against their property, as it could affect their ability to sell or refinance the property in the future.

Announcement of NOSI

Upon the announcement of the Ontario government’s intention to eliminate Notices of Security Interest, some locals may be perplexed as to what precisely a NOSI entails and if their residence is impacted.

Like a lein, a NOSI was originally a valid legal instrument, but fraudsters have since taken advantage of it. These scammers use the title of a property as leverage when financing or leasing goods like air conditioners, furnaces, and water heaters.

Furthermore, until they sell or refinance their house, homeowners sometimes aren’t even aware that the NOSI on their property exists. In some instances, they realize later on that they owe the firm who originally installed the equipment tens of thousands of dollars.

The Ontario Minister of Public and Business Service Delivery said earlier last week that he was aware of $1 billion worth of NOSIs that had been filed in the province. He also promised to eliminate the mechanism and any previous notifications in future legislation.

How to Determine if a NOSI Has Been Placed on Your Home?

If you are a homeowner in Canada, Ontario, and you are unsure if an NOSI has been placed on your home, there are steps you can take to find out. One way is to search the land registry office where your property is located. This search will reveal any NOSIs that have been registered against your property.

Another option is to consult with a real estate lawyer or a professional title search service. These professionals can search on your behalf and provide you with a report that outlines any NOSIs registered against your property.

Why is NOSI Important for Homeowners?

For homeowners, understanding NOSI is important because it can have implications for their property ownership and financial security. Here are some key reasons why NOSI is important for homeowners:

Financial Security

NOSI serves as a form of security for lenders, ensuring that they can recover their investment if the borrower defaults on the loan.

Property Ownership

While a NOSI does not transfer ownership of the property to the lender, it does give the lender the right to take possession of the property if the borrower defaults on the loan.

Selling or Refinancing

Having a NOSI registered against your property can affect your ability to sell or refinance the property, as it represents a financial obligation that must be addressed.