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The Real Property Amendment Act

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If you need an official copy, contact Statutory Publications.

S.M. 1995, c. 8

The Real Property Amendment Act

(Assented to November 3, 1995)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

C.C.S.M. c. R30 amended

1            The Real Property Act is amended by this Act.

2           Section 77 is amended

(a) by adding "will be bound by every other covenant, term and condition in the mortgage or encumbrance," after "creating it,"; and

(b) by striking out "any of the covenants" and substituting "every other covenant, term and condition".

3            The following is added after section 77:

Definition of "residential mortgage"

77.1(1)     In this section and sections 77.2 and 77.3, "residential mortgage" means a mortgage that is registered against the residence where the borrower resides and is granted, entered into or assumed for the purpose of permitting the borrower

(a) to acquire the residence;

(b) to make improvements to the residence;

(c) to make expenditures for family or household purposes; or

(d) to re-finance for a purpose referred to in clauses (a) to (c).

Definition of "borrower"

77.1(2)     In subsection (1), "borrower" means

(a) the mortgagor; or

(b) where the mortgage is assumed, the person who assumes the mortgage.

Liability under "personal covenant" or "covenant"

77.1(3)     In sections 77.2 and 77.3, "personal covenant" or "covenant" means all covenants, terms and conditions in a residential mortgage, and where those sections provide that liability in respect of the covenants ceases, liability ceases with respect to all personal covenants, covenants, terms and conditions in the mortgage.

Personal covenant in residential mortgage

77.2(1)     Notwithstanding section 77, a person who transfers an estate in land that is subject to a residential mortgage ceases to be liable under the personal covenant in the mortgage three months after the day the existing term of the mortgage expires, unless the mortgagee serves, within those three months, a written demand on the person for payment of the amount owing under the mortgage.

Application to mortgage payable without demand

77.2(2)     Subsection (1) applies despite any provision of the residential mortgage providing that all amounts outstanding at the end of the term are payable without a demand.

Liability under mortgage payable on demand

77.2(3)     Notwithstanding section 77, a person who transfers an estate in land that is subject to a residential mortgage that is, under the terms of the mortgage, payable on demand ceases to be liable under the personal covenant in the mortgage three months after the day the person serves the mortgagee a written notice of the transfer, unless the mortgagee serves on the person, within three months after being served with the notice, a written demand for payment of the amount owing under the mortgage.

Waiver of benefit

77.2(4)     A waiver of the benefit contained in subsection (1) or (3) by the person who transfers the estate in the land subject to the mortgage is of no force or effect unless it is entered into after the transfer referred to in subsections (1) and (3).

Liability ceases on approval of new mortgagor

77.3(1)     Notwithstanding section 77, where a mortgagee under a residential mortgage gives written approval to the assumption of the mortgage by the person to whom the mortgagor transfers an estate in the land that is subject to the mortgage, the mortgagor who transfers the estate in land ceases to be liable under all covenants contained in the mortgage.

Mortgagor may request approval

77.3(2)     A mortgagor who has transferred, or who proposes to transfer, an estate in the land that is subject to the mortgage and who wishes to obtain approval for the purpose of subsection (1) shall serve a written request for approval on the mortgagee not later than three months after the registration of the transfer.

Mortgagee may require information and fee

77.3(3)     The mortgagee may require the person seeking approval to provide

(a) reasonable financial information respecting the transferee or proposed transferee; and

(b) a reasonable fee to cover administrative costs, including the cost of obtaining a credit report.

Approval not to be unreasonably withheld

77.3(4)     A mortgagee shall not unreasonably withhold or refuse to give approval under this section.

Mortgagor may apply to court for approval

77.3(5)     Where a mortgagee fails to give approval under this section, the mortgagor may apply to the court and the court may, where it finds that the approval is unreasonably withheld or refused, give the approval, and the approval is as valid as though it were given by the mortgagee.

Service in accordance with mortgage or Q.B. Rules

77.4         A document that is required under section 77.2 or 77.3 to be served shall be served

(a) in the manner provided in the mortgage; or

(b) in accordance with the rules of the court respecting the personal service of documents or, where personal service cannot be effected, the other rules of the court respecting service.

Transitional

4(1)         Subsection 77.2(1), as enacted by section 3 of this Act, applies only where the existing term that is referred to in that provision expires after this Act comes into force.

4(2)         Section 2 of this Act and subsections 77.2(3) and 77.3(2), as enacted by section 3 of this Act, apply only where the transfer occurs after this Act comes into force.

Coming into force

5            This Act comes into force on the day it receives royal assent.