Furnace Liens in Ontario

Question:

Would a XYZ furnace rental contract appear on the parcel register?

Answer:

The furnace on the truck on the driveway is a chattel. Once it’s taken downstairs and installed, it’s a fixture.

XYZ Company loses all its rights with respect to the furnace, excepting:

1) a construction lien which it must register in 45 days, and perfect by the end of 90 days, and

2) any lien outlined in the purchase agreement which it might register against the property.

Usually, they don’t bother. The reason is that it’s a costly exercise for a $6,000,00 furnace, and most people pay. No matter what the contract says, they can’t come in and repossess it for late payment. However, there is usually a provision which enables them to register a lien. Sometimes, they do this when they hear that the property is being sold, “just to make sure”. So, shortly before closing, you might come across a lien from XYZ. If it were registered, then, it would be binding upon the Buyer. At that point see the Agreement of Purchase and Sale and whether the Seller dealt with this issue.

Brian Madigan LL.B., Broker

www.OntarioREalEstateSource.com

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