Fixtures and the PPSA: Of the Wooden Horse of Troy, Creditors in the Weeds and Statutory Ambush

The adoption of Personal Property Security Acts (PPSA) in many Canadian jurisdictions has brought with it a much enhanced ability to take a personal property security interest in fixtures, traditionally a category of real property. Although the fixture section of the PPSA attempts some balancing of the competing demands of real property and personal property interests, the concessions to the latter can cause uncertainty for those with stakes in the former. The uncertainty arises because of secrecy of personal property interests, the scope of allowable personal property interests and circularity of priorities. These problems became evident in the United States, under the original version of Article 9 of the Uniform Commercial Code, on which the PPSA fixture section is modelled. As a consequence of these problems, a new fixture section was introduced in the United States in 1972, a step which would be beneficial for Canadian PPSA jurisdictions to follow.