May 01, 2022
THE NEW REALITY: PRIVATE MORTGAGE DEFAULTS - POWER OF SALE & FORECLOSURE - Part LXXIII of a Series – Ask Me Anything Part 7…
In the previous ‘power of sale’ blog LXXII posted last week, I looked at the circumstances in which a mortgagee could charge and collect an extra 3 months’ interest from a borrower/mortgagor. This post corrects a couple of misconceptions that I hear all the time about statements of claim and judgments.
The first rule to remember is that Ontario is a self-help jurisdiction. Meaning that the mortgagee can enforce its mortgage without the need to resort to the courts. Therefore, the first misconception that I need to dispel is that a judgment for possession is not needed in order for a mortgagee to take possession of the mortgaged property. And neither is a writ of possession needed. A mortgagee can simply take possession of mortgaged property (so long as the mortgage contract gives this power to the mortgagee) when the mortgaged property is vacant or when the mortgaged property is tenanted. However, when the mortgaged property is owner occupied, a judgment for possession and a writ of possession are usually required.
Secondly, statements of claim can be very simple and easy documents to prepare and have issued by the courts. And there is no need to add into the statement of claim all of the mortgagee's costs and charges and fees that have been added to the mortgage debt at the time that the statement of claim is being issued. In fact, the mortgagee need only plead the existence of the debt, details of the mortgage security held, the default, the right to possession and the amount owing.
And the amount owing can simply be the principle amount owing under the mortgage as of the date of the last payment received, and the rate of interest charged on such arrears. Or, the mortgagee can put the amount of principle owing as of the last payment received, the interest that has accrued to the date of the issue of the statement of claim and the rate of interest accruing. But it is not necessary to detail all of the fees and charges that have been incurred by the mortgagee up to the date of the issue of the statement of claim. Those fees and charges, and additional fees and charges to be incurred thereafter, can always be added to a subsequent payout statement and charged and attempted to be collected later, whether or not particularized in the statement of claim.
As always, this blog is intended for information purposes only. It is not legal advice and cannot be relied on as such. Nor is it a substitute for hiring your own legal counsel, who will be an essential member of your power of sale and mortgage default team. And lastly, this blog is just my opinion. I reserve the right to change my mind. And I reserve the right to be wrong. Call me .... 416.662.9550
Be well and stay healthy.