A NOSI is filed under the Personal Property Security Act and shows up on the parcel register for the property. It is not a mortgage and not a tax lien, but in practice it functions as an encumbrance: lenders, mortgage brokers, and buyers' lawyers routinely require it to be discharged before closing.
New residential NOSIs were prohibited in Ontario as of 1 March 2019. NOSIs registered before that date remain on title until discharged through one of three paths: negotiated discharge through the secured party, discharge tied to a CPA-grade challenge of the underlying agreement, or court-ordered discharge.
