Canada

Earlier this month, Ontario unanimously passed the Homeowner Protection Act, 2024. The legislation will end a practice that has seen thousands of Ontarians unwittingly sign contracts that enable home-equipment rental companies to take security interests in their homes.

A security interest is similar to a mortgage. It gives a lender a claim on a borrower’s home to ensure that a loan is paid back. For many homeowners, getting rid of a security interest has meant paying sizable sums to purchase the equipment outright — often at a cost well in excess of the equipment’s true value — or fighting costly legal battles.

The number of Ontarians affected by consumer security interests has increased significantly, according to government data. The number of registered security interests rose from about 2,000 registrations a year in the early 2000s to more than 58,000 in 2023.

Ontario’s new legislation prohibits the registration of security interests — formally known as a Notice of Security Interest — for property that is primarily used for personal, family or household purposes, such as air conditioning units and water heaters.