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Nov 14, 2022

THE NEW REALITY: PRIVATE MORTGAGE DEFAULTS - POWER OF SALE & FORECLOSURE - Part LXXXII of a Series – Is Ontario still a Self-Help Remedy Jurisdiction – part 8

In my previous post LXXXI I set out the 3 simple rules imposed by the common law and by statute law on a mortgagee who intends to take possession of mortgaged property after default. In this post, I will summarize how a mortgagee may go about taking possession of various types of properties without a Court Order and without a Writ of Possession.

First, the Ontario Court of Appeal in its recent Hume decision, made it clear this past summer that when a mortgagee takes possession of mortgaged property under a mortgage that has gone into default, the mortgagee must do so peaceably. Or, peacefully. Meaning, without violence and without the threat of violence. But more generically, the mortgagee must not do anything that would be a criminal act under the Criminal Code of Canada, because doing anything that contravenes the Criminal Code would simply not be peaceable and not be peaceful.

The Court of Appeal in Hume specifically allowed the mortgagee in that case to take possession of an uninhabited residential home without a Writ of Possession. But the Court of Appeal expressed its concern about a mortgagee taking possession of a residential property that is actually occupied by the owner(s) and family.

From this decision, we can deduce that a mortgagee is permitted to take possession of the following types of properties without a Writ of Possession, so long as the mortgagee does so peacefully – that is, without violence or the threat of violence:

  • vacant land
  • commercial property
  • industrial property
  • unoccupied residential property

Occupied residential property appears to be the only type of real property that may require a writ of possession. The next post will unpack what this might mean for mortgagees. And remember, 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. Feel free to call me .... 416.662.9550 to discuss.

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