LAW 703 Lecture 10: Lecture 10 - Mortgage Remedies
LAW703 – Lecture 10: Remedies
Mortgage Remedies – Residential Tenants and Mortgagees in Possession
Residential Property with Tenant
- Mortgagees have to be careful when carrying out power of sale when there is a
residential tenant
- Mortgagees want to avoid becoming the landlord
- Once redemption period is over, they want to assess what type of lease and lease terms.
Mortgagee in Possession (MIP) – Mortgagee has taken control of the property and becomes
the landlord.
S.50(3) Mortgages Act – Does not become MIP if it makes inquiries on tenancy,
demands copy or details of lease
Protects mortgagee from becoming landlord under these scenarios
S. 47 (1) Mortgages Act – Person deemed to be landlord
o“A person who becomes the mortgagee in possession of a mortgage residential
complex which is the subject of a tenancy agreement between the mortgagor
and a tenant or who obtains title to the residential complex by foreclosure or
power of sale shall be deemed to be the landlord under the tenancy agreement.”
Mortgagee Forecloses – Becomes landlord
Anyone that obtains title by Power of Sale – Becomes Landlord
Mortgagee in Possession – Becomes Landlord
When does Mortgagee become MIP? Test:
1. Mortgagee does something to displace the mortgagor from the control and dominion of
the property – PRR Enterprises Inc. V. Niagara Falls Big Brothers (2004)
2. Requires legal or physical step to gain possession of property (changing locks, appoint
property manager)
MIP Deemed landlord under Residential Tenancies Act
What Kind of Residential Leases?
1. Short Term Lease – Less than 3 years
2. Long Term Lease – greater than 3 years
3. Suspiciously Advantageous to Tenant or Commercially Unreasonable
Suspiciously Advantageous to Tenant or Commercially Unreasonable: When mortgagor knows
they are gunna default and want to “stick it” to the bank. They make for eg. A 10 year lease at
very low rent. Commercially unreasonable.
Evicting Tenant under Land Titles act
S. 44(1) Land Titles Act
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Mortgage remedies residential tenants and mortgagees in possession. Mortgagees have to be careful when carrying out power of sale when there is a residential tenant. Mortgagees want to avoid becoming the landlord. Once redemption period is over, they want to assess what type of lease and lease terms. Mortgagee in possession (mip) mortgagee has taken control of the property and becomes the landlord. S. 50(3) mortgages act does not become mip if it makes inquiries on tenancy, demands copy or details of lease. Anyone that obtains title by power of sale becomes landlord. What kind of residential leases: short term lease less than 3 years, long term lease greater than 3 years, suspiciously advantageous to tenant or commercially unreasonable. Suspiciously advantageous to tenant or commercially unreasonable: when mortgagor knows they are gunna default and want to stick it to the bank. They make for eg. a 10 year lease at very low rent.
