Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Share on twitter
Share on facebook
Share on linkedin

Wait, My Mortgage Is Still Registered On Title?

Share on twitter
Share on facebook
Share on linkedin
Share on email

Wait, My Mortgage Is Still Registered On Title?

By:

Posted November 26, 2019

When I speak to clients selling their home, one of the important questions I ask is whether there is a mortgage or line of credit secured against the property. Most of the time, clients will tell me there is still an amount owing on their mortgage and/or line of credit and that it will need to be paid in full on the closing date. However, sometimes clients will indicate they paid off their mortgage years ago only to find out that it is still registered against the property once we look at title. “How did this happen?” they ask.

Well, the first thing to understand is that paying off your mortgage in full does not automatically result in it being discharged from title. So, anyone wanting their mortgage discharged from title after it is paid out should confirm with their lender this will be done and request that they send a copy of the discharge once it has been registered. Most institutional lenders take a few weeks to process and register discharges so following up after about a month after submitting the request is a good idea if the registered discharge has not been received.

While having a mortgage remain on title may seem like a negative (more on that later), there can be some benefits. For example, if someone has paid off their mortgage previously but wishes to get another loan in the future from the same lender, having the mortgage registration remain on title could simplify the refinance process. The reason for this is that if the lender originally registered a collateral mortgage on title, that would not only secure any current loans with that lender, but any future ones as well. As a result, the lender could loan up to the amount of the original mortgage without having to register anything new on title (which would mean not having to pay further legal fees or disbursements).

As I mentioned above, there are drawbacks to a mortgage remaining on title. One is that a new lender will insist that any previous mortgage registrations be deleted from title. Therefore, having an old mortgage on title could delay a refinance. Also, not discharging a mortgage can cause problems when trying to sell your property. Recently, I have had a couple of sale transactions where mortgages were given decades ago (but not discharged) and trying to find the lender to confirm that the loan had been paid in full (so the mortgage could be discharged from title) was extremely difficult. In one case, the lender was an individual who passed away a long time ago and the closing date had to be delayed until a court order was obtained to discharge the mortgage from title (which was an expensive resolution to the problem).

So, if you are ever in a position to pay off your mortgage, make sure you turn your mind to whether you want it discharged from title. Otherwise, dealing with the issue at a later time can result in some potential headaches.

This blog post was written by Jason Peyman, a member of the Real Estate and Business Law teams.  He can be reached at 613-369-0376  or at jason.peyman@mannlawyers.com.

More Resources

Blog |
Business Law

By: 

Posted October 20, 2021

On October 19, 2021, the new Ontario Business Registry System launched. This new online registry now enables businesses and not-for-profit corporations to directly access services[...]
Blog |
Environmental Law

By: 

Posted October 14, 2021

In the decision of Greenpeace Canada (2471256 Canada Inc. v. Ontario (Minister of the Environment, Conservation and Parks), 2021 ONSC 4521, released September 3, 2021,[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted October 1, 2021

This blog continues our exploration of the potential employment law consequences stemming from the degree of control a party exerts within a variety of business[...]
Blog |
Personal Injury

By: 

Posted September 27, 2021

Personal Injury lawyers and their clients are all too familiar with the carnage and suffering caused by impaired drivers.  Canada has the worst rate of[...]
Blog |
Bankruptcy and Insolvency, Business Law

By: 

Posted September 24, 2021

As is noted by the Court of Appeal in McEwen (Re), released August 12, 2021, referred to here as “Traders”, the BIA is a complete[...]
Blog |
Wills, Trusts and Estates

By: 

Posted September 23, 2021

In-Trust For Accounts have become a common way for parents and grandparents to set aside money to finance their children or grandchildren’s post-secondary education. A[...]

Subscribe to Our Newsletter

Name*
Consent*
This field is for validation purposes and should be left unchanged.