Daycare Equipment at Closing: Owned, Leased or Still Financed?

The furniture and appliances you see during a daycare tour are not automatically assets the seller can transfer free of other claims. A dishwasher may be financed, the photocopier leased, and built-in equipment supplied by the landlord. An invoice can help identify a purchase, but it does not prove the item is still owned by the seller or free of security interests today.

Before relying on an “all equipment included” statement, match the purchase schedule to the physical items, ownership records, financing documents and any required release or consent. The objective is concrete: know what stays, what rights you receive, what payment continues and which essential item needs a replacement plan.

Build the list around identifiable items

Record the description, location, make, model and serial number where available. For chairs, tables and other items without useful serial numbers, use quantities and a clear description. Photos support identification and condition; they do not establish title.

Use the exact selling entity, not just the daycare’s trading name. The operator, property owner and equipment owner may be different persons or companies. Ask whose name appears on the invoice and agreement, whether the item was later sold or refinanced, and whether a related company is meant to join the transfer.

The daycare transaction document guide places the asset list within the larger deal file. For equipment, the extra detail is the chain between a particular item and the right being sold. “Kitchen equipment” is too broad if the refrigerator stays but the landlord’s dishwasher does not belong to the seller.

Owned, financed and leased are different handover questions

An owned item may still secure a loan. Review the financing agreement and current payout information, then identify the release needed for the specific collateral. A general security agreement can cover categories of assets rather than name each table or appliance. Paying an equipment vendor in full years ago does not rule out a later lender’s security interest.

A leased item may give the operator a right to use it, not a right to sell it. Read the term, payment schedule, end-of-term options, transfer and change-of-control provisions. Ask the lessor to confirm the actual route: permitted continuation, assignment, a new lease, a quoted buyout or return. A nominal purchase option at the end of a lease is not evidence that ownership has already passed.

Some lease interests fall within BC’s Personal Property Security Act even when they do not secure payment or performance; section 3 includes the defined category of leases for more than one year. That is another reason not to assume a registry entry means a conventional unpaid purchase loan. See the current PPSA.

In a share purchase, the company may remain the equipment owner or lessee, but the contracts can still contain relevant change-of-control terms. Do not reuse an asset-sale handover conclusion without checking the actual transaction structure.

Use the Personal Property Registry for the right question

BC’s Personal Property Registry records notices of security interests and liens against personal property. It is not a comprehensive inventory proving everything a business owns. The Province’s current search guidance explains available search channels, including Service BC and third-party providers. Confirm the current service route and timing rather than assuming a public instant-search account is available.

Search criteria matter. A business-debtor search requires the appropriate legal name. Serial-number searches have a prescribed scope: the regulation’s “serial numbered goods” category includes vehicles, manufactured homes, boats, outboard motors, trailers and aircraft. An ordinary appliance having a manufacturer’s serial number does not automatically make it searchable under that category. The number remains useful for matching the asset to an agreement. See the Personal Property Security Regulation’s definitions and collateral-description rules.

Read the actual results, including debtor identity, secured party, collateral description and relevant amendments. A search using the wrong name, or only an appliance’s serial number, cannot support a confident “nothing found” conclusion. A result is also dated: keep its search criteria and time with the deal records and address whether a later search is needed for closing.

The PPSA’s general rule is that a security interest continues in collateral unless the secured party authorizes the dealing, subject to the Act and its exceptions. A business sale should therefore not be assumed to erase a registered claim. Section 28 is the starting rule, not a complete priority opinion for your transaction.

Make the payout and release specific

Where a lender is to be paid, obtain a current written payout statement and identify what it releases. A lender financing several locations may agree to release only the equipment being acquired. The required outcome could be a partial release rather than discharge of the seller’s entire financing registration. Match that scope to the purchase schedule and the relevant registry change.

Distinguish the seller’s promise to pay from the closing mechanism that applies the money and obtains the release. Record who handles the payment, where the instructions are independently verified, what confirmation is required and who follows up on registration changes. Do not send money using unverified emailed banking changes.

In a fictional transaction, the agreed asset price is $300,000 and a $6,500 equipment payout is to come from that same price. Ignoring all other adjustments and taxes for this isolated example, $6,500 goes to the secured creditor and $293,500 to the seller. The buyer has not paid $306,500 merely because the payout appears on a separate line. If the agreement instead requires a payment in addition to the price, state that explicitly. The purchase agreement determines the arrangement; this example does not supply one.

Do not let the title review hide an operating gap

For each essential item, ask what happens if the transfer is not ready. A leased dishwasher that must be returned may require a replacement, installation, suitable utility connections and confirmation that the revised operation remains acceptable. Removing equipment from the price does not make those needs disappear.

Ownership and product safety are separate. Check model identification, condition, required parts and relevant recalls before relying on used children’s products. Health Canada’s second-hand product guidance provides a starting point. A clean financing search is not a safety assessment, and a product remaining in the room does not guarantee it is suitable for the daycare’s approved use.

Use the equipment handover sheet (PDF) to separate owned assets, continuing leases, required releases and unresolved items. At the final walk-through, compare the actual items with the agreed schedule and record substitutions or missing pieces. Do not silently replace an identified asset with “equivalent equipment” unless the agreement permits that outcome.

An unresolved item should lead to a specific choice: obtain the missing release or consent, agree on a documented replacement arrangement, revise the transaction on acceptable terms, or decline to rely on that asset. JQ-Properties can help organize the commercial questions so the equipment supporting the business is clearly distinguished from equipment merely present on the premises.

By Justin Qiao, Personal Real Estate Corporation, Justin Qiao Group | RE/MAX Crest Realty.

Sources checked September 9, 2026.