Legal Brief for March, 2022

Register Your Discharge

When you are in the fortunate position of having paid off the mortgage on your home your bank or financial institution will send a letter to you which has enclosed with it a document known as a Discharge of Mortgage.  Many (most) people quickly read the letter and take a look at the Discharge document and then file both in whatever folder or file they have for their property.

While they are pleased to receive the official confirmation of the termination of their mortgage, what they don't realize is that they actually need to submit the Discharge of Mortgage document to the Land Titles Office to be registered in order to have the Mortgage removed from their Certificate of Title.  There is only one lender in Canada who will take steps to register a Discharge for you - that being Royal Bank of Canada.  All other lenders send you the Discharge and let you take care of it.  If you don't get around to having it submitted to the Land Titles Office then that Mortgage will stay on your title literally forever.

I have two real estate sale transactions in my office right now that I am working on which have Mortgages that were placed in the 1950's and which are still registered on the Titles.  The Mortgages were both paid out 50 years ago, but unfortunately the homeowners didn't realize that they had to send their Discharge documents to the Land Titles Office to be registered.

Lenders in Alberta are required to issue a Discharge of Mortgage free of charge to their borrowers (unlike other provinces, such as Ontario where they are allowed to levy a fee).  However, if the first Discharge is lost, then they are entitled to charge a fee to issue a replacement Discharge, which is what I will be obtaining in the two matters I am currently handling.

Therefore, this month's word to the wise is - make sure you carefully read the letter you receive from your lender after you have paid out your mortgage!