By MURRAY SNIDER, Founding Partner

The lawyers at Chand & Co. can help you deal with any type of mortgage and loan enforcement situation you encounter. If you are in the need of professional legal advice with respect to your options enforcing a mortgage, contact our office and schedule a consultation with one of our lawyers.

The area of law encompassing mortgage enforcement causes a great deal of stress in many peoples’ lives because of the complexity and often the large amounts of money involved.  A mortgage is a type of lien that is registered on a property and represents security for a debt. Mortgage enforcement is required when a mortgagor fails to comply with the agreed-upon terms in a contract. In Ontario, there are many provisions in place to ensure that a lender’s rights are protected in the event of a default of a mortgage.

When a mortgage goes into default, the mortgagee can collect and get paid through selling the property. There are three common enforcement options available to a mortgagee when enforcing a mortgage that has gone into default. The mortgage enforcement options are through a foreclosure, judicial sale or by a power of sale. The mortgagee can start the foreclosure proceeding and take title to the property, or more commonly, serve the mortgagor with a Power of Sale. There are certain advantages to each of the remedies available to mortgagees and each one will need to be properly considered by a legal professional in order to provide the best course of action for your specific scenario.

Under Ontario’s Mortgages Act, R.S.O. 1990, c. M.40 (the “Act”), legal action can be taken by issuing of a Notice of Sale. The Act grant rights for the mortgagee to provide the mortgagor with a 35-day clear out notice with intent to sell their property. This notice can be given to the mortgagor after the defaulted payment exceeds a 15-day period. Certain information must be included in the Notice of Sale including, a detailed description of the agreed upon mortgage and a detailed lay out of the amounts owing under the mortgage. The document must be clearly set out that if the amount owed is not paid within the 35-day period, the mortgagee has the right to sell the property at their discretion.

There are certain situations that can pose a risk to the mortgagee and will cause unexpected delay in the process. It is important to seek out legal advice to ensure the mortgage enforcement process moves along without unnecessary delays. For example, if a Notice of Sale is unfairly served on the mortgagor, then the mortgagor has the right to challenge the Notice of Sale by seeking an injunction from a judge. This will lead to further delays and extend the enforcement process.

Although there are mechanisms in place in mortgage enforcement procedures protecting both parties in a mortgage contract, the law and most mortgage terms often favour the lender. A mortgagee’s enforcement strategy, and choice of remedy to deal with a default will depend on carefully considered options as early as possible. There are deadlines in place that will require immediate action on the part of the mortgagee. There are also potential pitfalls a mortgagee can encounter making the need to contact a lawyer with experience in this area of mortgage enforcement imperative on navigating you through a speedy resolution.

Whether you require mortgage enforcement services or further legal advice on the best course of action to take, contact the lawyers at Chand & Co. and ensure your legal rights are protected.

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