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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:
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
The following is added after section 77:
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).
In subsection (1), "borrower" means
(a) the mortgagor; or
(b) where the mortgage is assumed, the person who assumes the mortgage.
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.
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.
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.
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.
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).
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.
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.
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.
A mortgagee shall not unreasonably withhold or refuse to give approval under this section.
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.
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.
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.
This Act comes into force on the day it receives royal assent.