Mortgages Act, R.S.O. 1990, c. M.40

• Jurisdiction: Ontario

Mortgages Act

R.S.O. 1990, CHAPTER M.40

Consolidation Period: From January 1, 2022 to the e-Laws currency date.

Last amendment: 2021, c. 4, Sched. 11, s. 22.

CONTENTS

Definitions

1 In this Act,

“conveyance” includes assignment, appointment, lease, settlement and other assurance and covenant to surrender made by deed on a sale, mortgage, demise or settlement of any property or on any other dealing with or for any property; and “convey” has a corresponding meaning; (“cession”, “céder”)

“encumbrance” includes a mortgage in fee or for a less estate, a trust for securing money, a lien, and a charge of a portion, annuity or other capital or annual sum; and “encumbrancer” has a corresponding meaning, and includes every person entitled to the benefit of an encumbrance, or to require payment or discharge thereof; (“sûreté”, “bénéficiaire de la sûreté”)

“land” includes tenements and hereditaments, corporeal or incorporeal, houses and other buildings, and also an undivided share in land; (“bien-fonds”)

“mortgage” includes any charge on any property for securing money or money’s worth; “mortgage money” means money or money’s worth secured by a mortgage; “mortgagor” includes any person deriving title under the original mortgagor or entitled to redeem a mortgage, according to the person’s estate, interest or right in the mortgaged property; and “mortgagee” includes any person deriving title under the original mortgagee. (“hypothèque”, “hypothécaire”, “montant de l’hypothèque”, “débiteur hypothécaire”, “créancier hypothécaire”) R.S.O. 1990, c. M.40, s. 1.

PART I
RIGHTS AND OBLIGATIONS OF MORTGAGORS AND MORTGAGEES

Obligation on mortgagee to transfer instead of reconveying

2 (1) Despite any stipulation to the contrary, where a mortgagor is entitled to redeem the mortgagor may require the mortgagee, instead of giving a certificate of payment or reconveying and on the terms on which the mortgagee would be bound to reconvey, to assign the mortgage debt and convey the mortgaged property to any third person as the mortgagor directs, and the mortgagee is bound to assign and convey accordingly.

Idem

(2) The right of the mortgagor to require an assignment belongs to and is capable of being enforced by each encumbrancer or by the mortgagor, despite any intermediate encumbrance; but a requisition of an encumbrancer prevails over that of the mortgagor, and as between encumbrancers a requisition of a prior encumbrancer prevails over that of a subsequent encumbrancer.

Exception

(3) This section does not apply if the mortgagee is or has been in possession. R.S.O. 1990, c. M.40, s. 2.

Right of mortgagor to inspect title deeds

3 Despite any stipulation to the contrary, a mortgagor, as long as the mortgagor’s right to redeem subsists, is entitled, at reasonable times, on request, and at the mortgagor’s own cost and on payment of the mortgagee’s costs and expenses in that behalf, to inspect and make copies or abstracts of or extracts from the documents of title relating to the mortgaged property in the custody or power of the mortgagee. R.S.O. 1990, c. M.40, s. 3.

Right of mortgagor to copy of mortgage

4 (1) Despite any stipulation to the contrary, within thirty days after receipt by the mortgagee of a mortgage executed by the mortgagor, the mortgagee or the mortgagee’s solicitor or representative shall deliver or mail or cause to be delivered or mailed a true copy of the mortgage to the mortgagor or the mortgagor’s solicitor or representative. R.S.O. 1990, c. M.40, s. 4 (1).

Offence

(2) If the mortgagee or the mortgagee’s solicitor or representative fails to deliver or mail or cause to be delivered or mailed a true copy of the mortgage to the mortgagor or the mortgagor’s solicitor or representative within thirty days after receipt by the mortgagee of the mortgage executed by the mortgagor as required by subsection (1), the mortgagor may, within ten days after the period of thirty days has elapsed, demand from the mortgagee a true copy of the mortgage, and, if the mortgagee fails to comply with the demand within ten days after receipt of the demand, the mortgagee is guilty of an offence and on conviction is liable to a fine of not more than $200. R.S.O. 1990, c. M.40, s. 4 (2).

Facsimile

(3) For the purposes of this section, a true copy shall include a facsimile as defined in section 1 of the Land Titles Act. 2000, c. 26, Sched. B, s. 14 (1).

Section Amendments with date in force (d/m/y)

2000, c. 26, Sched. B, s. 14 (1) - 06/12/2000

Action for possession of land by mortgagor

5 A mortgagor entitled for the time being to the possession or receipt of the rents and profits of any land, as to which no notice of intention to take possession or to enter into receipt of the rents and profits thereof has been given by the mortgagee, may sue for such possession, or sue or distrain for the recovery of such rents or profits, or to prevent or recover damages in respect of any trespass or other wrong relative thereto, in the mortgagor’s own name only, unless the cause of action arises upon a lease or other contract made by the mortgagor jointly with any other person, and in that case the mortgagor may sue or distrain jointly with such other person. R.S.O. 1990, c. M.40, s. 5.

Application of insurance money

6 (1) All money payable to a mortgagor on an insurance of the mortgaged property, including effects, whether affixed to the freehold or not, being or forming part thereof, shall, if the mortgagee so requires, be applied by the mortgagor in making good the loss or damage in respect of which the money is received.

Idem

(2) Without prejudice to any obligation to the contrary imposed by law or by special contract, a mortgagee may require that all money received on an insurance of the mortgaged property be applied in or towards the discharge of the money due under the mortgagee’s mortgage. R.S.O. 1990, c. M.40, s. 6.

Covenants to be implied:

7 There shall, in the several cases mentioned in this section, be deemed to be included, and there shall in those several cases be implied, covenants to the effect stated in this section, by the person or by each person who conveys, as far as regards the subject-matter or share thereof expressed to be conveyed by that person or each person with the person, if one, to whom the conveyance is made, or with the persons jointly, if more than one, to whom the conveyance is made as joint tenants, or with each of the persons, if more than one, to whom the conveyance is made as tenants in common, that is to say,

on mortgage by beneficial owner

(a) in a conveyance by way of mortgage, the following covenants by the person who conveys, and is expressed to convey as beneficial owner, namely,

(i) for payment of the mortgage money and interest, and observance in other respects of the proviso in the mortgage,

(ii) for good title,

(iii) for right to convey,

(iv) that, on default, the mortgagee shall have quiet possession of the land, free from all encumbrances,

(v) that the mortgagor will execute such further assurances of the said lands as may be requisite, and

(vi) that the mortgagor has done no act to encumber the land mortgaged,

according to the forms of covenants for such purposes set forth in Schedule B to the Short Forms of Mortgages Act, being chapter 474 of the Revised Statutes of Ontario, 1980, subject to the provisions of that Act;

on mortgage of leaseholds, by beneficial owner

(b) in a conveyance by way of mortgage of leasehold property, the following further covenants by the person who conveys and is expressed to convey, as beneficial owner, namely,

(i) that the lease or grant creating the term or estate for which the land is held is, at the time of conveyance, a good, valid and effectual lease or grant of the land conveyed, and is in full force, unforfeited, and unsurrendered, and in no wise become void or voidable, and that all the rents reserved by, and all the covenants, conditions and agreements contained in the lease or grant and on the part of the lessee or grantee and the persons deriving title under the lessee or grantee to be paid, observed and performed, have been paid, observed and performed up to the time of conveyance, and

(ii) that the person so conveying, or the persons deriving title under that person, will at all times, as long as any money remains on the security of the conveyance, pay, observe and perform, or cause to be paid, observed and performed, all the rents reserved by, and all the covenants, conditions and agreements contained in the lease or grant, and on the part of the lessee or grantee and the persons deriving title under the lessee or grantee to be paid, observed and performed, and will keep the person to whom the conveyance is made and those deriving title under that person indemnified against all actions, proceedings, costs, charges, damages, claims and demands, if any, to be incurred or sustained by that person or those persons by reason of the non-payment of such rent, or the non-observance or non-performance of such covenants, conditions and agreements, or any of them. R.S.O. 1990, c. M.40, s. 7.

Implied covenants in mortgages are joint and several

8 In a mortgage, where more persons than one are expressed to convey as mortgagors, or to join as covenantors, the implied covenants on their part shall be deemed to be joint and several covenants by them, and where there are more mortgagees than one the implied covenant with them shall be deemed to be a covenant with them jointly unless the amount is expressed to be secured to them in shares or distinct sums, in which latter case the implied covenant with them shall be deemed to be a covenant with each severally in respect of the share or distinct sum secured to each mortgagee. R.S.O. 1990, c. M.40, s. 8.

Exception

9 Sections 7 and 8 do not apply to a mortgage of land in a part of Ontario designated under Part I of the Land Registration Reform Act, that is executed...