A buyer of business assets in British Columbia or Alberta takes them subject to every security interest already perfected against them. Each province puts the rule at section 33, and each says the debtor’s rights in collateral “may be transferred consensually or by operation of law” — Alberta in the same words — while the secured party’s rights survive. Selling the truck does not lift the charge on the truck.
Key takeaways
SECTION 01 OF 09
Section 33(2) of British Columbia’s Personal Property Security Act says “the rights of a debtor in collateral may be transferred consensually or by operation of law but a transfer by the debtor does not prejudice the rights of the secured party under the agreement or otherwise”. Alberta’s section 33(2), marginal note “Alienation of rights of debtor”, permits the same transfer “notwithstanding a provision in the security agreement prohibiting transfer or declaring a transfer to be a default”.
Both add a clause worth reading twice: the lender keeps “the right to treat a prohibited transfer as an act of default”, so the closing itself can trip the seller’s loan. Ontario’s s. 39 stops earlier. Treadstone Law on whether security survives a sale draws the line: on a share sale the debtor never changes; on an asset sale the charge must be dealt with.
The registry is not notice. BC s. 47 says registration “does not by itself constitute express, constructive or implied notice”, and Alberta s. 47 that it “is not constructive notice or knowledge of its existence or contents to third parties”. Neither helps a buyer who did not search.
SECTION 02 OF 09
This is the sharpest difference between the Acts. BC s. 20(c) subordinates an unperfected interest in “chattel paper, a document of title, an instrument, money, an intangible or goods” to a transferee who “acquires an interest under a transaction that is not a security agreement”, gives value, and “acquires the interest without knowledge of the security interest and before the security interest is perfected”.
Alberta’s s. 20(b), in a section amended in 2023, subordinates one “in goods or an intangible” to a transferee who “acquires an interest for value under a transaction that is not a security agreement before the security interest is perfected”. Value, a non-security transaction, timing. Nothing elsewhere restores the missing condition: Alberta s. 66(2) says “A person does not act in bad faith merely because the person acts with knowledge of the interest of some other person”, and BC s. 68(2) says the same of “the interest of another person”.
SECTION 03 OF 09
Ontario confines the escape to “intangibles other than accounts” in clause 20(1)(d), so an unperfected charge on the book debts survives a sale that clears one on the vans. BC and Alberta have no such words. BC s. 1 defines “intangible” as “personal property, other than goods, chattel paper, a document of title, an instrument, money and investment property”, and Alberta s. 1(1)(x) is materially identical. An account is a monetary obligation, so it sits in neither exclusion list.
A separate trap runs the other way. BC s. 4(h) takes outside the Act “a sale of accounts or chattel paper as part of a sale of a business out of which they arose unless the vendor remains in apparent control of the business after the sale”, and Alberta s. 4(h) uses the same formula. Leave the seller visibly running the business after closing and the relief is gone. See Treadstone Law on security in receivables.
SECTION 04 OF 09
Most asset buyers misread this rule. BC s. 30(2): “A buyer or lessee of goods sold or leased in the ordinary course of business of the seller or lessor takes free of any perfected or unperfected security interest in the goods given by the seller or lessor”, whether or not the buyer knows of it, “unless the buyer or lessee also knows that the sale or lease constitutes a breach of the security agreement”. Alberta s. 30(4) is the same rule in Alberta’s wording.
The test measures the seller’s ordinary course, not yours. A hardware store sells hammers in the ordinary course; it sells itself once. Both Acts also close a route a distressed deal might take: BC s. 30(8) and Alberta s. 30(3) each say a qualifying sale “does not include a transfer as security for, or in total or partial satisfaction of, a money debt or past liability”.
SECTION 05 OF 09
Alberta s. 30(7) says a buyer of consumer goods or equipment prescribed as serial number goods “takes free from a security interest in the goods that is perfected under section 25 if the goods are not described in the registration” “by serial number entered into the field labelled for the receipt of serial numbers”. No knowledge condition appears there. BC s. 30(6) is stricter: the buyer takes free only if it “bought or leased the goods without knowledge of the security interest”.
Alberta publishes the qualifying list on its search-request page: motor vehicles, trailers, mobile homes, aircraft, boats, outboard motors and farm vehicles. For a buyer of a trucking, construction or farming business that is the difference between inheriting a charge on the fleet and not. Treadstone Law on serial-numbered goods makes the lender’s mirror-image point.
SECTION 06 OF 09
Both Acts start forgiving: BC s. 43(6) and Alberta s. 43(6) each provide that validity “is not affected by a defect, irregularity, omission or error” unless it is “seriously misleading”. Alberta then makes that mechanical at section 43(7): a registration “is invalid if a search of the records of the Registry using the name, as prescribed, of any of the debtors… does not disclose the registration as an exact or inexact match”, and 43(7.2) adds that an inexact match “is not, by that fact alone, valid”.
BC keeps the judgment call: section 43(7) invalidates a registration where a seriously misleading error affects a debtor name, and subsection 43(8) adds that “it is not necessary to prove that anyone was actually misled by it”. Debtor names are where this bites: see Treadstone Law on registration after a name change.
SECTION 07 OF 09
Neither counter is a consumer web portal. BC Registry Services says “the Personal Property Registry records security interests and liens against personal property belonging to businesses and individuals”, and searches go in at a Service BC location, by mail, or through a service provider, because “Online usage is designated for professionals who conduct PPR searches on a regular basis and have a premium account with BC Registries”.
Alberta routes searches through intermediaries: “You can search through any registry agent office in Alberta”, per the provincial guidance; its liens overview puts it plainly: “Search the personal property registry system before buying any items that are considered personal property”. One Alberta rule should change how your deal is run. Section 52(3): “No action under this section may be brought by a person who relied on a printed search result unless that person or an agent of that person requested the printed search result.” Taking the seller’s printout costs you that claim against the Registrar. BC’s Act has no equivalent, and ordering your own search is routine diligence in Treadstone Law’s overviews for BC and Alberta.
SECTION 08 OF 09
A registration proves an interest was claimed, not that money is still owed. BC s. 18 and Alberta s. 18 each let a person with an interest in the collateral demand the security agreement and a statement of the indebtedness. Alberta allows “10 days after the secured party receives it, in the case of any other secured party” and 25 days for a trust indenture trustee; BC s. 18(7) and (8) set the same periods, and BC s. 18(15) estops the replier, as does Alberta s. 18(10).
Discharge is a registration, not a letter, and both run a forty-day clock. BC s. 50(4): “the secured party must register a financing change statement amending or discharging the registration not later than 40 days after the demand is given”. Alberta s. 50(4) “shall require that the secured party, not later than 40 days after the demand is given” do the same. If the lender does nothing, BC s. 50(5) and Alberta s. 50(5) both let the person who gave the demand register it themselves. A total discharge in BC carries no charge.
SECTION 09 OF 09
A clean search is a photograph, and both Acts build in a window where the picture lies. BC s. 51(1) and Alberta s. 51(1) each subordinate a registered interest, where the debtor transfers collateral with the secured party’s prior consent, to interests “arising in the period from the expiry of the 15th day after the transfer”. That is a subordination rule between competing claimants, not a fifteen-day amnesty for the buyer. What works: search the exact legal names including predecessors, demand a statement under section 18, hold back at closing, re-search after discharge — see assumed liabilities and the security your own lender takes.
The boundary: this article describes two statutes and no others. Ontario numbers the same ideas differently and answers differently on accounts: see what a buyer takes subject to in Ontario. Québec is not a variant of this scheme at all, and an insolvency sale changes the analysis again — see title and liens in an insolvency purchase. Never carry a section number across a provincial border.
Only if it was ordinary for the seller, not for the buyer. The rule looks at whether the sale was in the seller’s ordinary course of business — a hardware store selling hammers qualifies, but a business selling itself does not, because a business only sells itself once.
Not identically in both provinces. In British Columbia the buyer must also have taken the interest without knowledge of the security interest before it was perfected; Alberta’s current wording requires only value, a non-security transaction, and timing, with no separate knowledge condition.
No, in either province. Registration itself does not by itself constitute notice, express or implied, to third parties — a buyer who never searched the registry cannot be treated as having known about a registered interest just because it was on file.
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