What is NOSI (Notice of Security Interest)?
A Notice of Security Interest (NOSI), is a lien on personal property that has been registered on title to a property, in many cases, without the knowledge of the owner. It often comes in the form of equipment on the property such as a water heater, air conditioner, furnace, or water softener. In many cases, the owner of the property would receive an offer from a company to allow the owner to purchase such equipment and a contract would be signed setting out the terms of repayment. Unfortunately, many of these door-to-door companies fail to explain to the homeowner that the equipment is not a true rental, but essentially a rent-to-own contract that would allow the provided to register a NOSI on the title to the owner’s property. The terms of the contract would require monthly payments and in many cases, the cost to buy out the equipment would be much higher than the actual value.
When the owner sells the property, the Buyer will discover the NOSI when its lawyer does a title search on the property. What follows is often a dispute between the parties as to who is responsible for discharging or paying out the NOSI on closing. This issue creates extra work for lawyers and often leads to disputes between the parties, which could result in the deal not closing. Unfortunately, many homeowners are unaware of the nature of the Agreement between themselves and the supplier.
The homeowner should check if any of the equipment on his property is a rental or if it is rent-to-own and subject to a NOSI. This can be discovered by looking at the contract and calling the supplier to confirm the exact nature and terms of the contract between the supplier and the owner.
The homeowner is obligated to discharge any NOSIs (Notice of Security Interest) registered on title relating to any equipment located on his property.