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Nov 28, 2022

THE NEW REALITY: PRIVATE MORTGAGE DEFAULTS - POWER OF SALE & FORECLOSURE - Part LXXXIII of a Series – Is Ontario still a Self-Help Remedy Jurisdiction – part 9

In my previous post LXXXII I identified 4 types of properties that appear to be safe for a mortgagee to take possession of - without first going to Court to obtain a Writ of Possession; being vacant land, commercial property, industrial property and unoccupied residential property. In this post I will try to decide where the law might be headed with respect to occupied residential property only.

In doing so, we have to keep in mind that the Court of Appeal in the Hume case allowed the mortgagee to take possession of the mortgagor’s home that had been vacated because the home had been damaged by fire. What the Court of Appeal said about residential homes that were actually occupied, is the focus of this post.

The Court of Appeal made a point of commenting that it just might not be enough for a mortgagee to take possession of an occupied residential home without violence or the threat of violence. The Court gave an example of an occupied home in which the owners are temporarily away (at work during the day or even away for the weekend). And the Court mused that in those scenarios, the mortgagees could change the locks without violence and without the threat of violence, as no one would be at the home when possession was being taken. However, if the mortgagee did just that, it would dispossess the owners of their home and their personal property, without giving them an opportunity to make arrangements to move to another location.

The Court wrote that while doing this may not be violent, but is not likely to be found to be peaceable.

So, this leaves us with 2 possibilities when a mortgagee wants to take possession of occupied residential property. The first possibility is that the Court will ultimately rule that that cannot be done peaceably and as a result, a writ of possession will always be necessary.

Alternatively, the Court might decide that the mortgagee simply has to give adequate notice to the mortgagor of its intention to take possession the next time that the mortgagee finds the house to be empty. The theory being that this new notice will give the mortgagors a fair and reasonable opportunity to make alternate living arrangements.

Only time will tell which way the Court will go.

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.

Be well and stay healthy