Personal Property Securities Act 1999

Part 5 When buyers or lessees of goods or other collateral take goods or other collateral free of security interest

Part 5 heading: amended, on 15 April 2004, by section 13 of the Personal Property Securities Amendment Act 2004 (2004 No 30).

52 Buyer or lessee of collateral takes collateral free of unperfected security interests

A buyer or lessee of collateral who acquires the collateral for value takes the collateral free of an unperfected security interest in the collateral, unless the unperfected security interest was created or provided for by a transaction to which the buyer or lessee is a party.

Example

Person A has a security interest in person B’s car.

Person B sells the car to person C.

Person C acquires the car for $3,500 before person A registers a financing statement in respect of the car.

Person C takes the car free of person A’s security interest.

Compare: Personal Property Security Act 1993 s 20(3) (Saskatchewan)