Removing an old mortgage from title can be tricky.
Imagine the following scenarios: You enter into a purchase agreement to sell your home and unbeknownst to you, there is an old mortgage on title. What should you do if you paid off the mortgage but it was not removed from title? What if you cannot find the lender? In some instances, a loved one has passed, leaving their home to you, and you discover the registration of a charge that should have been removed- you have limited information and don’t know what to do.
Most buyers want clear title when purchasing a home and anything less could result in the deal not closing. There are several options available to a mortgagor (borrower under a mortgage) or their legal representative depending on the specific circumstances as described below.
What happens if you paid off the mortgage, but it wasn’t removed from title?
If all money due under the mortgage was paid to the mortgagee, or it appears that there is no money owed, then a mortgagor can apply under section 243 of the Land Title Act to remove the mortgage from title.
What if you cannot find the lender?
If the registered mortgagee cannot be found, and there may or may not be amounts outstanding, then an application can be made under section 243 (a) to remove the mortgage from title where the registered mortgage is absent from British Columbia or cannot be found.
Another option available is to seek relief under the Limitation Act, SBC 2012, c. 13 (the “Act”) which states that the ultimate limitation period is 15 years. This means that the right to advance a claim begins from the mortgage due date, date of the last payment or written acknowledgement of the debt.
A final option is to seek relief under section 3 of the Property Law Act, RSBC 1996, c. 377 or the Law and Equity Act, RSBC 1996, c. 253, s. 37. There, the vendor of an interest in land may seek an order regarding the contract for sale of the property.
Recent cases
Our firm has helped numerous clients facing these challenging situations. In the past two months, I have successfully been to court for two applications to remove old mortgages from title- including where the mortgage holder (creditor) could not be found. This was done in an urgent manner because both clients had upcoming closing dates and needed clear title right away.
If you would like to discuss removing an old mortgage, please book a free consultation with us and we can discuss.
None of the above, is intended to be legal advice, but merely conveys general information. We invite you to discuss potentially removing an old mortgage from title with us, and we provide a free consultation.
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SYNTHESIS LEGAL (cliogrow.com)
By: Ali Al-Samak