Mortgages | By Lawyers
Skip to main content

Mortgages

BC

This publication guides practitioners in British Columbia through the preparation of loan agreements, mortgages, and guarantees.

1 Matter Plan

Overview

The commentary covers the drafting and execution of loans, charges, amendments, variations, and assignment deeds, as well as completion, registration, discharge, and default, whether acting for the borrower or the lender. 

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Precedents in this publication include:

  • Library of loan documents, including:
    • Mortgage;
    • Promissory note;
    • Agreement for assignment of rents;
    • General security agreement;
    • Guarantee;
    • Borrowing resolution for a corporation;
  • Assignment of mortgage;
  • Default notice.
Icon

1 Matter Plan Included

  • Folder icon Letters & Documents
    • Item icon Electronic Filing Acknowledgment
  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Mortgages (BC)
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Remote Witnessing
    • Item icon Further information
  • Item icon Overview
    A mortgage is a contract to secure the payment of money by registration of a charge on the title of real property as security for the loan. Registration of the charge gives the lender legal remedies, including bringing an action to sell the secured property on the borrower's default. A loan ...

    This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

  • Item icon Summary of the process
    The usual steps in a mortgage matter are:

    This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Mortgages
    • Item icon To do list - Mortgages
    • Item icon First steps
    • Item icon Client details, verification, and source of funds
    • Item icon Retainer instructions - Mortgages
    • Item icon Conflict of interest check
    • Item icon Initial letter to borrower client with retainer agreement
    • Item icon Initial letter to lender client with retainer agreement and summary of loan terms
    • Item icon Retainer agreement - British Columbia
    • Item icon Scope of work - Mortgages - Acting for the lender
    • Item icon Scope of work - Mortgages - Acting for the borrower
    • Item icon Summary of loan terms
    • Folder icon If required - Client consents
      • Item icon Consent to joint retainer
      • Item icon Consent to act with conflict
    • Item icon Time and costs estimates
    • Folder icon If required - Costs disclosure update and a non-engagement letter
      • Item icon Letter to client updating costs disclosure
      • Item icon Non-engagement letter
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Confidentiality deed
        • Item icon Deed for general use
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements and contracts
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
      • Item icon Standard annexure note for documents
  • Folder icon B. The mortgage
    • Item icon Due diligence
      Lender's due diligence To deter fraud, lenders perform the following due diligence checks:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Caveats
      The Torrens land title system is based on the registration of interests and confers absolute proof of ownership subject to notices registered on title. As some interests in land cannot be registered the caveat system enables such interests to be endorsed on title. While caveat registration does not ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Loan agreements and registered charge
      A loan agreement sets out the terms of the mortgage secured by a charge registered on the title of the borrower’s property. Two common loan agreements are a Mortgage Commitment and Promissory Notice, which can be found on the matter plan.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgage commitment
    • Item icon Mortgage
    • Item icon Interest
      The payment of interest is not a fundamental requirement of a loan agreement. A loan agreement may simply require the repayment of the principal sum. However, the loan agreement may provide for interest to be payable at a stipulated rate against the value of the principal. Section 6 of the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Electronic registration
      A mortgage is submitted for registration to the Land Title and Survey Authority (LTSA) using MyLTSA Enterprise. Mortgages, discharges, and variations can be registered electronically via the myLTSA portal. The Form B (Mortgage) is filed to secure a mortgage on the title to a property. The ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon BC Finanical Services Authority
    • Item icon Collateral mortgages
      Collateral mortgages are typically registered for an amount equal to 100% to 125% of the property value rather than the principal of the mortgage. This allows the lender to advance additional money under the charge security up to the registered amount without requiring the borrower to refinance the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Collateral security
      The borrower may pledge collateral in addition to the charge on title to real property as security for the mortgage. This additional security may include assets such as accounts receivable, a general assignment of rents, personal guarantees, or the borrower's personal property. The collateral is ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Vendor take-back mortgages
      A vendor take-back (VTB) mortgage refers to a mortgage provided by the vendor of the property to the purchaser for a portion of the purchase price. The terms can be incorporated into the contract of purchase and sale, or a VTB can be agreed on between the parties after the contract if the purchaser ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Subsequent mortgages
      When a charge is already registered on the title, any subsequent charge is often referred to as a second mortgage. To register a second mortgage, the second lender may need the consent of the first lender before using the property as security for the loan to be advanced. Consent is necessary when ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Reverse mortgages
      A reverse mortgage allows the borrower to obtain money from the equity they hold in their property without having to sell. This type of mortgage gives the borrower access to equity up to 55% of the value of the property. The borrower pays back the mortgage in full when they move out, sell the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Equitable mortgages
      Under the Torrens land titles system there can be no legal mortgage without registration. However, once executed, there is an equitable mortgage pending registration. There are variants of the equitable mortgage but in essence the two types are:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Repayment
      A loan agreement is a contract. If the loan agreement provides that repayment is on a specific date, that is the date for repayment for the purposes of a contract dispute. Early or late repayment will be a breach of the contract and may be subject to prepayment charges or other legal remedies.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

  • Folder icon C. Acting for the lender
    • Item icon Letter to borrower's lawyer requesting details to prepare loan documents
    • Item icon Letter to borrower's lawyer requesting documents for closing
    • Folder icon Loan documents for the borrower to sign
      • Item icon Borrower identification verification form
      • Item icon Acknowledgement and direction to register documents
      • Item icon Acknowledgement of standard charge terms
      • Item icon Direction for funds
      • Item icon Statutory declaration by borrower - Concise
      • Item icon Statutory declaration by borrower - Extensive
      • Item icon Statutory declaration by borrower - Blank
      • Item icon Authorization to complete
      • Item icon Non-merger covenant
      • Item icon Assignment of insurance
      • Item icon Certificate of independent legal representation and identification
      • Item icon Lawyer's undertaking - Purchase
      • Item icon Lawyer's undertaking - Refinance
      • Folder icon If required - Additional loan documents
        • Item icon Promissory note
        • Item icon Promissory note - No interest
        • Item icon Agreement for assignment of rents - Concise
        • Item icon Agreement for assignment of rents - Extensive
        • Item icon Notice and direction to tenants
        • Item icon General security agreement
        • Item icon Acknowledgement of receipt of financing statement
        • Item icon Environmental representations, warranties and indemnities
        • Item icon Guarantee
        • Item icon Waiver of independent legal advice - Guarantor
        • Item icon Certificate of incumbency
        • Item icon Certificate of officer
        • Item icon Borrowing resolution of corporation
        • Item icon Letter to lender's lawyer with corporate opinion
        • Item icon Certificate of independent legal advice
  • Folder icon D. Acting for the borrower
    • Item icon Letter to lender's lawyer with closing documents
    • Item icon Mortgage closing instructions
    • Folder icon If required - Request discharge statement or postponement
      • Item icon Letter to current lender requesting mortgage statement for discharge
      • Item icon Letter to creditor's lawyer requesting postponement
  • Folder icon E. Discharge, transfer, assignment, and variation
    • Item icon Discharge of mortgage
      Once the borrower repays the mortgage inclusive of any interest, costs, and fees, the lender discharges the charge security. The Form C (Release of Mortgage) must be used and once registered the property ceases to be encumbered by the security in favour of the lender. The form is available on ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Discharge statement
    • Item icon Form C (Release) - LTSA Practice Guide
    • Item icon Acknowledgement and direction to register documents
    • Item icon Registration of the discharge
      It is standard procedure to write to the lender to arrange discharge of the mortgage security they hold on the title to a borrower's property. In response the lender typically forwards the borrower's lawyer a document outlining the balance of the mortgage amount due, if any, inclusive of any fees ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Letter to lender chasing discharge of mortgage
    • Item icon Transfer or assignment of mortgage or charge
      The lender holding a charge on title to the borrower's property as security for a mortgage has an interest in the land which the lender may transfer or assign. The registered owner of a charge has the right to transfer or assign their interest pursuant to s 206 of the Land Title Act. This is ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Assignment of mortgage
    • Item icon Variation of mortgage or charge
      The terms or provisions of a mortgage may be varied or amended by agreement between the lender and borrower. This variation may be registered pursuant to s 206 of the Land Title Act. See the matter plan for an Agreement to Amend Mortgage form which can be attached to a notice registered on the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Agreement to amend mortgage
  • Folder icon F. Default
    • Item icon Default
      A default usually arises when the borrower fails to make payment to the lender in accordance with the terms of the loan agreement. A default can also relate to the borrower's performance or observance of the mortgage covenants such as the borrower failing to maintain home insurance on the secured ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Letter to borrower providing notice of default
    • Item icon Notice by Secured Creditors
    • Item icon Contractual power of sale
      There is no statutory power of sale in British Columbia. Most loan agreements grant the lender the right to sell the secured property if the mortgage is in default. Lenders in British Columbia may not exercise the right to a power of sale contained in a loan agreement until the borrower's normal ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Obtaining possession
      Every mortgage stipulates that the borrower will maintain quiet ownership of the property covered for as long as they are not in default. However, in the event of default, the lender may enforce an assignment of the rents or profits clause to receive income the property generates. As a result, the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Power of foreclosure
      This is a process by which the lender obtains an order from the court that transfers the title to the secured property to the lender and the borrower’s right to redemption is extinguished. Transfer of the property to the lender is full satisfaction of the borrower’s debt. The lender can then hold ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Petition to the Court
    • Item icon Notice of Hearing
    • Item icon Informational Notice for Foreclosure Proceedings
    • Item icon Certificate of Pending Litigation
  • Folder icon G. Finalizing the matter
    • Item icon Letter to borrower client after closing finalizing the matter
    • Item icon Letter to lender client with report enclosing documents
    • Item icon Invoice recital - Mortgages - Borrower
    • Item icon Invoice recital - Mortgages - Lender
    • Item icon Trust Ledger Statement
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

Our Authors

A team of legal professionals contribute to By Lawyers' publications, all helping to ensure that content is updated regularly to reflect changes in legislation, practice, and procedure.
Meet Our Authors
Authors