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It has been in effect since November 5, 2015.
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|C.C.S.M. c. M200||The Mortgage Act|
|Enacted by||Proclamation status (for any provisions coming into force by proclamation)|
|RSM 1987, c. M200|| |
• s. 26 and 27
– not proclaimed, but repealed by SM 2005, c. 16, s. 24
• remainder of Act
– in force: 1 Feb 1988 (Man. Gaz.: 6 Feb 1988)
|SM 1989-90, c. 90, s. 28|
|SM 1992, c. 46, s. 62||
• in force: 15 Aug 1993 (Man. Gaz.: 3 Jul 1993)
|SM 1993, c. 14, s. 86||
• in force: 5 Sep 2000 (Man. Gaz.: 26 Aug 2000)
|SM 2001, c. 11||
• in force: 1 Jun 2002 (Man. Gaz.: 11 May 2002)
|SM 2005, c. 16, s. 25||
• in force: 1 Apr 2007 (Man. Gaz.: 2 Dec 2006)
|SM 2011, c. 35, s. 31|
|SM 2015, c. 43, s. 33|
C.C.S.M. c. M200
The Mortgage Act
|Table of Contents||Bilingual (PDF)||Regulations|
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
Part I applies to all mortgages, whether of real or personal property, save where it is otherwise expressly stipulated.
Parts II and III apply to mortgages of real property only.
In this Part,
"conveyance" includes assignment, appointment, lease, settlement, and other assurance and covenant to surrender, made by deed, on a sale, mortgage, demise, or settlement, of any property, or on any other dealing with or for any property; (« transfert »)
"encumbrance" includes a mortgage in fee, or for a less estate, and a trust for securing money, and a lien by registration of a judgment or otherwise, and a charge of a portion, annuity, or other capital or annual sum; (« charge »)
"encumbrancer" includes every person entitled to the benefit of an encumbrance, or to require payment or discharge thereof; (« bénéficiaire de charge »)
"land" includes tenements and hereditaments, corporeal or incorporeal, and houses and other buildings, also an undivided share in land; (« bien-fonds »)
"mortgage" includes any charge on any property for securing money or money's worth; (« hypothèque »)
"mortgagee" includes any person from time to time deriving title under the original mortgagee; (« créancier hypothécaire »)
"mortgage money" means money or money's worth secured by a mortgage; (« somme garantie »)
"mortgagor" includes any person from time to time deriving title under the original mortgagor, or entitled to redeem a mortgage, according to his estate, interest, or right, in the mortgaged property; (« débiteur hypothécaire »)
"property" includes real and personal property, and any debt, and any thing in action, and any other right or interest. (« bien »)
The fees of a mortgagee of land for inspection of the mortgaged premises, except the preliminary inspection consequent upon an application for a loan or a renewal or extension of a loan, shall be borne by the mortgagee and shall not be charged to the mortgagor or to the mortgage account.
Subject to subsection (2) and notwithstanding any stipulation, agreement, or covenant, contained in any mortgage of land or in any agreement renewing or extending any such mortgage, no fees, costs, charges, or expenses or allowance for the time and service of any officer, inspector, or employee of the mortgagee or of any other person appointed for the purpose, shall be charged to the mortgagor or added to the mortgage account in respect of the collection of any moneys due and payable under the mortgage, by way of commission upon, or expenses of, the collection or of getting in the mortgagee's share of the crop grown on the mortgaged premises in any year.
Nothing in this section affects a mortgagee's right to costs as between party and party in any action or proceedings under the mortgage, whether in or out of court, or to the costs of distress allowed by The Distress Act, or, where grain is taken without levying a distress, to the actual expenses reasonably incurred in transporting the grain to the nearest available market or to any elevator, siding, or other place agreed on.
Where a mortgagor has made default in his obligation to deliver the mortgagee's share of a crop, the mortgagee may also charge to the mortgagor or add to the mortgage account a disbursement made for collection expenses equal to 5% of the value of the mortgagee's share, or to the amount of $10., whichever is the lesser; but no such disbursement incurred within 20 days after the commencement of the default shall be so charged or added unless the mortgagor has made, and failed to make good, a similar default in a previous year.
Nothing in this section affects, alters, or varies, any right that a mortgagee has to reasonable and necessary costs and expenses of collecting or endeavouring to collect the rents or profits or rental value of the mortgaged land where it was leased to, or occupied by, any person other than the owner.
Where a mortgagor is entitled to redeem he may require the mortgagee, instead of giving a certificate of payment or re-conveying, and on the terms on which he would be bound to re-convey, to assign the mortgage debt and convey the mortgaged property to any third person, as the mortgagor directs; and the mortgagee is bound to assign and convey accordingly.
The right of the mortgagor under this section to require an assignment as aforesaid belongs to, and is capable of being enforced by, each encumbrancer, or by the mortgagor, notwithstanding any intermediate encumbrance; but a requisition of an encumbrancer prevails over a requisition of the mortgagor, and, as between encumbrancers, a requisition of a prior encumbrancer prevails over a requisition of a subsequent encumbrancer.
This section does not apply in the case of a mortgagee being or having been in possession.
Before a mortgagee is obliged to assign a mortgage debt and convey the mortgaged property, as in this section provided, he is entitled to be furnished, except in the case of an assignment to the mortgagor, with an abstract of title and certificates from a registrar, where the land is under the old system, showing the state of the title, and, in the case of land being under the new system, sufficient official certificates or evidence showing the number and order and amounts of the encumbrances and the names of the encumbrancers, and also proof by statutory declaration of the existence of each subsequent encumbrance, and that it is wholly or partly unsatisfied, as the case may be.
This section has effect notwithstanding any stipulation to the contrary.
In the case of a mortgage made after January 1, 1903, the mortgagor, as long as his right to redeem subsists, may from time to time, at reasonable times, on his request, and at his own cost, and on payment of the mortgagee's costs and expenses in that behalf, inspect and make copies or abstracts of or extracts from the documents of title relating to the mortgaged property in the custody or power of the mortgagee.
This section has effect notwithstanding any stipulation to the contrary.
All money payable on an insurance to a mortgagor shall, if the mortgagee so requires, be applied by the mortgagor in making good the loss or damage in respect of which the money is received.
Without prejudice to any obligation to the contrary imposed by law or by special contract, a mortgagee may require that all moneys received on an insurance be applied in or towards the discharge of the money due under his mortgage.
This section is subject to The Law of Property Act.
Where, upon payment of a loss claim pursuant to a mortgage clause forming part of an insurance policy respecting property insured under the policy, an insurer is entitled to be subrogated to the rights of a mortgagee or encumbrancer, if that mortgage clause, or other mortgage clauses forming part of the insurance policy, names other mortgagees or encumbrancers as persons to whom loss may become payable under the policy, the rights of the insurer so acquired by subrogation are subject to, and postponed in priority to, the rights of all mortgagees or encumbrancers named in any mortgage clause forming part of the policy.
Where, pursuant to a mortgage clause forming part of an insurance policy, a mortgage or encumbrance on property insured under the policy is assigned or transferred to the insurer by reason of the insurer paying the balance of principal and interest owing under the mortgage or encumbrance to the mortgagee or encumbrancer pursuant to the mortgage clause, if the mortgage clause, or other mortgage clauses forming part of the insurance policy names other mortgagees or encumbrancers as persons to whom loss may become payable under the policy, the rights of the insurer so acquired under the mortgage or encumbrance so assigned or transferred are subject to, and postponed in priority to, the rights of those other mortgagees or encumbrancers so named.
Any mortgagee of freehold or leasehold property, or any assignee of the mortgagee, may take and receive from the mortgagor or his assignee a release of the equity of redemption in the property, or may purchase it under any judgment or decree or order without thereby merging the mortgage debt as against any subsequent mortgagee or person having a charge on the same property.
Where the prior mortgagee or his assignee acquires the equity of redemption of the mortgagor in the manner aforesaid, no subsequent mortgagee or his assignee is entitled to foreclose or sell the property without redeeming or selling, subject to the rights of the prior mortgagee or his assignee, in the same manner as if the prior mortgagee or his assignee had not acquired the equity of redemption.
Proceedings for foreclosure of a mortgage or for sale of the mortgaged premises, or under any power of sale, do not lapse in case of an assignment of the mortgage pending those proceedings; but the assignee may avail himself of any such proceedings and continue the proceedings for the purpose of realizing the mortgage money, or securing title by foreclosure, in all respects in the same way, and with the same effect, as the person or corporation by whom the proceedings were instituted might have done.
A mortgagee of land may make advances of money to the owner of the land, whether the owner is the maker of the mortgage or acquires title after the making of the mortgage and whether the mortgage is made before or after the coming into force of the Act, for the purpose of purchasing seed grain for use in sowing the land; or the mortgagee may purchase such seed grain and deliver it to the owner for the aforesaid purpose.
The mortgagee may add any moneys so advanced, or the cost of grain so delivered, together with such reasonable expenses as have been incurred by the mortgagee in connection therewith, to the amount secured by the mortgage and they are, notwithstanding any statute or other law to the contrary and without registration in a land titles office, from the date of the advance or delivery, part of the moneys secured by the mortgage to the mortgagee, and bear interest at the mortgage rate, and are a charge upon the mortgaged land and have the like priority in the same manner as the other moneys so secured, and are payable on December 1 next following the date of the advance or delivery, or at such other time as may be agreed upon between the mortgagee and owner.
[Repealed] S.M. 1993, c. 14, s. 86.
Where a vendor of land advances money to a purchaser of that land for the purchase of seed grain to be used in sowing the land or sells seed grain to the purchaser for such a use, the money so advanced or the price of the seed grain so sold, with interest thereon as agreed upon between the vendor and purchaser, is part of the moneys secured and payable to the vendor under his agreement for sale, and is a lien upon the land mentioned therein, and has the same priority as the other moneys secured thereby and payable thereunder, and is payable on December 1 next following the date of the advance or sale or at such other time as is agreed upon between the vendor and purchaser.
Where the mortgagee or vendor takes a promissory note from the mortgagor or purchaser for the amount so payable, and sets out therein, or in a separate document referring thereto and signed by the mortgagor or purchaser, the amount and kinds of seed grain for the purchase of which the note was given and a description of the land on which the seed grain is to be sown, the mortgagee or vendor, as the case may be, has a security interest in the crops grown on the land as though the promissory note were a seed grain mortgage and he may register a financing statement under The Personal Property Security Act in respect thereof.
A mortgagee or vendor may exercise the rights conferred by this section only with the previous consent in writing of all prior mortgagees and vendors.
None of the provisions of The Homesteads Act apply to the security provided for in this section.
No mortgagee or vendor is obliged to see to the application or use of any money advanced or seed grain sold.
The mortgagee or vendor, upon the owner or purchaser making any default under the promissory note, may take possession of the crops or the grain resulting therefrom and may hold them or it until the amount due and payable is paid, or sell them or it or part thereof, the proceeds to be applied, after deducting all expenses of and incidental to the taking possession and sale, in reducing the amount unpaid under the promissory note; and for that purpose the mortgagee or vendor, or his agent, may enter upon or into the lands, enclosures or buildings upon or in which the crops or grain are situated; all of which is without prejudice to the right of the mortgagee or vendor to pursue any other rights or remedies possessed by him.
Any person to whom a mortgagee or vendor advances money or sells seed grain under this section, and who makes use thereof or of any portion thereof for any purpose other than sowing land comprised in the mortgage held by the mortgagee or in the agreement for sale from the vendor, as the case may be, is guilty of an offence and is liable, on summary conviction, to a fine of not less than $50. and not more than $300., and in default of payment thereof to imprisonment for a term of not less than one month and not more than three months.
In this section,
"mortgagee" means a mortgagee of land and includes the executors, administrators, successors, and assigns, of a mortgagee; (« créancier hypothécaire »)
"owner" means the registered owner of land or a purchaser of land or the executors, administrators, or assigns, of either; (« propriétaire »)
"purchaser" means any purchaser under, or assignee of, an agreement of sale of land or the executors, administrators, or assigns, of either; (« acheteur »)
"seed grain" means seed of any kind or kinds; (« semences »)
"vendor" means a vendor of land or his executors, administrators, or assigns. (« vendeur »)
Where default has occurred in making any payment due under any mortgage or in the observance of any covenant contained therein and, under the terms of the mortgage, by reason of the default, the whole principal and interest secured thereby has become due and payable, the mortgagor may, notwithstanding any provisions to the contrary, and at any time prior to sale or foreclosure under a mortgage, perform the covenant or pay such arrears as may be in default under the mortgage, together with costs, and he is thereupon relieved from the consequences of non-payment of so much of the mortgage money as may not then have become payable by reason of lapse of time.
Where default has occurred in making any payment of original principal due under any mortgage and by reason of the default the mortgagee has taken proceedings by sale or foreclosure, the mortgagor may, notwithstanding any law or statute or any provision in the mortgage to the contrary, at any time prior to sale or foreclosure pay to the mortgagee the full amount of moneys unpaid under and secured by the mortgage as at the date of such payment, together with costs of proceedings to that date, and that payment shall be full payment of the mortgage; and the mortgagee shall, on receiving payment of the conveyancing fee therefor and after the allowance of a reasonable time therefor, give a discharge thereof, or if required by the mortgagor or subsequent purchaser, an assignment or transfer of the mortgage to any third person as the mortgagor or subsequent purchaser directs.
Where the mortgagee or the encumbrancer under a mortgage or encumbrance of land or an interest therein becomes the owner of that land or that interest therein by virtue of a final order of foreclosure made by any court in the province, or under The Real Property Act, or otherwise, the rights of the mortgagee or the encumbrancer, as the case may be, and of any person claiming under him, in any covenant under the mortgage or encumbrance, or under any bond or collateral security or obligation for the payment of the mortgage debt or any debt under the encumbrance, are extinguished, and any judgment obtained for enforcement of the covenant is also extinguished.
To remove doubts, every mortgage duly registered against the lands comprised therein is, and, subject to section 31 of The Builders' Liens Act, shall be deemed to be, as against the mortgagor, his heirs, executors, administrators, assigns and every other person claiming by, through, or under him, a security upon the lands to the extent of the moneys or money's worth actually advanced or supplied to the mortgagor under the mortgage (not exceeding the amount for which the mortgage is expressed to be a security), notwithstanding that the moneys or money's worth, or some part thereof, were advanced or supplied after the registration of any certificate of judgment or of any conveyance, mortgage, or other instrument, affecting the mortgaged lands, executed by the mortgagor or his heirs, executors, or administrators, and registered subsequently to the first-mentioned mortgage, unless before advancing or supplying the moneys or money's worth the mortgagee in the first-mentioned mortgage had actual notice of the registration of the certificate of judgment or of the execution and registration of the conveyance, mortgage, or other instrument; and the registration of the certificate of judgment, conveyance, mortgage, or other instrument, after the registration of the first-mentioned mortgage, does not constitute actual notice to the mortgagee of the judgment, conveyance, mortgage, or other instrument.
The purchaser in good faith of a mortgage may, to the extent of the mortgage and except as against the mortgagor, his heirs, executors, or administrators, set up the defence of purchase for value without notice, in the same manner as a purchaser of the property mortgaged might do.
It is not necessary, in order to maintain the defence of purchase for value without notice, to prove payment of the purchase money or any part thereof.
The rule or law under which a mortgagee is entitled to demand and receive notice or a bonus of six months' interest, in case the principal of his mortgage is not paid on the day it falls due, is not in force in the Province of Manitoba.
Notwithstanding any rule, law, or agreement, to the contrary, where default has been made in payment of any principal money payable under a mortgage on real estate or agreement respecting a mortgage on real estate, the mortgagor or person entitled to make the payment so in arrear, may, within three months after the due date of the payment, pay it to the mortgagee without any notice or the payment of interest or bonus in lieu of such notice, upon paying interest to the date of the payment.
Notwithstanding any agreement to the contrary, where default has been made in the payment of any principal money payable under a mortgage on real estate or agreement respecting a mortgage on real estate for a period of more than three months, the mortgagor or person entitled to make the payment may at any time, upon payment of interest to date of payment and upon payment of three months' additional interest on the principal money so in arrear, pay the same, or he may in lieu thereof give the mortgagee at least three months' notice in writing of his intention to make such a payment at a time named in the notice; and in the event of his making the payment on the day so named he may make it without any payment of interest further than to the date of payment.
Where the mortgagor or person entitled to make the payment referred to in subsection (3) fails to make the payment at the time mentioned in the notice, he shall thereafter be entitled to make the payment only on paying the principal moneys so in arrear and interest thereon to the date of payment, together with three months' interest in advance.
Nothing in this Act affects or limits the rights of the mortgagee to recover by action or otherwise the principal money so in arrear after default has been made, or to exercise any other rights conferred upon him by the mortgage or by law.
Subject to subsection (7), where any principal money or interest secured by a mortgage of real estate is not, under the terms of the mortgage, payable till a time more than five years after the date of the mortgage, if, at any time after the expiration of the five years, any person liable to pay or entitled to redeem tenders or pays to the person entitled to receive the money the amount due for principal money and interest to the time of the tender or payment, together with three months' further interest in lieu of notice, no further interest shall be chargeable, payable, or recoverable, at any time thereafter on the principal money or interest due under the mortgage.
Nothing in subsection (6) applies to any mortgage upon real estate given by a joint stock company or other corporation, or to any debenture issued by such a company or corporation for the payment of which security has been given by way of mortgage on real estate.
Where, in any mortgage upon real estate, provision is made that if interest is paid promptly it will be accepted at a lower rate than that provided in the mortgage, and interest at the lower rate has been paid according to those conditions up to the time when all principal money has been payable, any person liable to pay or entitled to redeem, is entitled to pay the principal money and interest thereon at the lower rate at any time after the time for payment of the principal money upon giving three months' notice of his intention to make such a payment, or on paying three months' interest at such lower rate in lieu of notice; but if the mortgagor or person entitled to make the payment fails to make it at the time mentioned in the notice, he is thereafter entitled to make the payment only on paying the principal and interest at the lower rate to the date of payment, together with three months' interest at the lower rate in advance.
This section applies to all mortgages in existence on February 20, 1914, as well as all mortgages thereafter made.
Wherever a mortgage made before March 16, 1906, purporting to be made in pursuance of The Short Forms Act, contains a power of sale which provides for a sale without notice, the mortgagee, his heirs, executors, administrators, successors or assigns, may, and shall be held to have been always entitled to, take proceedings to sell under the mortgage according to the tenor of the power, and to have or have had the benefit of the provisions of column 2 of the second Schedule of The Short Forms Act.
A mortgagor entitled for the time being to the possession or receipt of the rents and profits of any land as to which no notice of his intention to take possession, or to enter into the receipt of the rents and profits thereof, has been given by the mortgagee, may sue for the possession, or sue or distrain for the recovery of the rents or profits, or to prevent or recover damages in respect of any trespass or other wrong relative thereto, in his own name only, unless the cause of action arises upon a lease or other contract made by him jointly with any other person, and in that case he may sue or distrain jointly with the other person.
A mortgagee's costs of, and incidental to, the exercise of a power of sale may, without an order, be taxed by one of the taxing officers of the Court of Queen's Bench at the instance of any person interested.
The taxing officer shall tax any such bill of costs upon request of such an interested party on payment of such fees for the use of the Crown as would be payable upon a taxation of any bill of costs in an action in the court.
The taxing officer shall, upon the taxation, be guided by the tariff of costs allowed in actions in the court where applicable, and, as to matters not there provided for, he shall allow such sums as he thinks fair and reasonable.
Any taxation may be appealed from as if it were a taxation of costs between party and party in an action in the court.
If upon the taxation more than 1/6 is taxed off the fees charged in any bill, the costs of the taxation shall be paid by the mortgagee.
A mortgagee's costs of and incidental to
(a) the exercise of a power of sale under a mortgage registered under The Registry Act; or
(b) an application to a district registrar of a land titles district for a final order of foreclosure under such a mortgage;
may, without an order, at the instance of a person interested therein, be taxed by the district registrar for the land titles district in which the land or any part of it is situated.
Where costs are taxed under this section, section 143 of The Real Property Act, relative to the tariff of costs and to appeals, applies.
In case a mortgagee's costs have been taxed under this section they shall not thereafter be taxed under section 23; and in case the costs have been taxed under section 23 they shall not thereafter be taxed under this section.
A mortgagor, as long as his right to redeem subsists, may, in writing, request the mortgagee to furnish to the mortgagor a statement of account of the mortgage debt.
Where a mortgagee receives a written request under subsection (1) to furnish a statement of account for the mortgage debt, he shall, within 21 days of the date he receives the written request, at no cost to the mortgagor, furnish to the mortgagor or his authorized agent a statement in writing setting out
(a) the amount of payments credited, including apportionment as between principal, interest, and, if applicable, taxes;
(b) the amount of any payments made by the mortgagee and charged to the mortgagor's account, indicating the nature of the payments;
(c) the amount of the outstanding balance owing on the mortgage debt as of a date not more than 30 days prior to the date he receives the written request;
(d) the date of the last credited payment received within the period covered by the statement; and
(e) the status of the tax account, where tax instalments have been paid to the mortgagee and credited separately for tax purposes.
Subject to subsection (4), a mortgagor is not entitled to receive a statement of account of the mortgage debt more than once in any single period of 12 months.
Where a statement of account of the mortgage debt is required in order to pay off the mortgage debt or in connection with the sale of the mortgaged property, the mortgagor may, in writing, request the statement to be furnished before the expiration of 12 months after a previous statement of account was furnished; but, in that case, the statement need not cover a period of time greater than 12 months, or the period of time that has elapsed since any previous statement was furnished under this section, whichever is the shorter period.
Every mortgagee who fails to comply with the request of the mortgagor for a statement under this section shall, in addition to any other penalty or damages to which he may be liable, suffer the reasonable costs incurred by the mortgagor in obtaining a computed statement of account of the mortgage debt elsewhere to be credited to the mortgagor as against the mortgage debt; and the amount of those costs shall be conclusively deemed to have been a payment in reduction of the principal balance outstanding as of the date upon which the amount of those costs is signified to the mortgagee by the mortgagor or his authorized agent, if the mortgagor or his authorized agent signifies the amount of those costs in writing by mail or otherwise within 30 days of the date on which the mortgagee failed to comply with the request made by the mortgagor under this section.
Every mortgage instrument executed on or after January 1, 1973, shall have printed or stamped thereon in bold-face characters or in variant coloured ink the words "The Mortgage Act provides that the mortgagor can obtain, free of charge, from the mortgagee a statement of the debts secured by this mortgage once every 12 months, or as needed for payoff or sale".
Where a mortgagee habitually and voluntarily furnishes to the mortgagor an annual statement of account of the mortgage debt indicating the balance owing at the end of the period covered by the statement, the total of payments credited during the period, the total amount of interest charged during the period and the total of payments made by the mortgagee and charged to the mortgagor during the period, the statement shall be deemed to be a statement furnished in compliance with subsection (2), unless the mortgagor first informs the mortgagee that a statement of account of the mortgage debt is required at a time or month in each year that is different from the time or month at which the statement is habitually and voluntarily furnished; and, in that case, that mortgagor shall make a request in accordance with subsection (1), but an annual statement of account of a mortgage debt furnished habitually and voluntarily by a mortgagee to the mortgagor need not contain any information set out in an annual statement of account of the mortgage debt furnished previously.
This section does not apply to a mortgage unless
(a) it is a mortgage of real property used for farming purposes; or
(b) it is a mortgage of real property on which a residence is situated.
Where a mortgagor acknowledges in writing the amount of the outstanding balance owing on the mortgage debt as of any date, a statement in respect of the mortgage given by the mortgagee under this section is not required to give any information with respect to any period prior to the date as of which the indebtedness is acknowledged.
REVERSE MORTGAGE LOANS
In this Part,
"borrower" means an individual who borrows money under a reverse mortgage loan and signs a reverse mortgage as a mortgagor, and includes
(a) an individual who applies for a reverse mortgage loan, and
(b) after the reverse mortgage is signed, a person from time to time deriving title under the original borrower; (« emprunteur »)
"Consumer Protection Office" means the Consumer Protection Office continued under The Consumer Protection Act; (« Office de la protection du consommateur »)
"lender" means a lender under a reverse mortgage loan, and includes
(a) a person from time to time deriving title under the original lender, and
(b) a prospective lender; (« prêteur »)
"minister" means the minister appointed by the Lieutenant Governor in Council to administer this Part; (« ministre »)
"person entitled to disclosure" means
(a) a borrower, and
(b) an individual whose consent is required under The Homesteads Act; (« personne devant recevoir des renseignements »)
"prescribed" means prescribed by a regulation made under this Part;
"reverse mortgage" means a document under which an individual grants a mortgage, whether statutory or equitable, of real property as security for a reverse mortgage loan; (« hypothèque inversée »)
"reverse mortgage loan" means a loan that is secured by a charge on real property owned by an individual, and under which
(a) no payment of principal or interest is due before the entire balance of principal and interest is due, or
(b) the borrower is not required to make periodic payments designed to reduce, from one payment to the next, the balance owing under the loan,
but does not include
(c) a loan under which no interest is payable,
(d) a loan where the borrower is required to make periodic payments, at least once every two years, to repay all accrued interest on the loan;
(e) a loan that is repayable only on demand, if there is no restriction on when the lender may demand payment; or
(f) a loan between persons who, in making the loan, are not dealing with each other at arm's length. (« prêt hypothécaire inversé »)
This Part and the regulations under this Part apply to every reverse mortgage loan entered into after this Part comes into force, despite any agreement made or waiver given to the contrary before or after this Part comes into force.
A lender may enforce payment of the debt due under a reverse mortgage loan only against the borrower and only through a foreclosure of the mortgaged property or under an order for sale of the mortgaged property made under The Real Property Act or by a court of competent jurisdiction.
When a property encumbered by a reverse mortgage is sold or otherwise disposed of, the total liability of the borrower under the reverse mortgage loan at the time of the disposition is the lesser of the balance otherwise owing under the loan and
(a) the sale proceeds, if the property is sold
(i) by the lender, or
(ii) by the borrower to a purchaser in good faith for value; or
(b) the fair market value of the property at the time of the disposition, in any other case.
A borrower is not liable for any fee, cost or penalty charged in connection with a reverse mortgage loan, including an application or processing fee, cost or penalty unless
(a) the lender has complied with subsection 33(2); and
(b) the borrower signs the reverse mortgage.
If a borrower has paid an amount for which he or she is not liable because of subsection (1), the lender must refund it to the borrower on written demand.
This section does not apply to a fee charged directly to a borrower
(a) by a lawyer for independent legal advice; or
(b) by an independent appraiser for an appraisal of the property to be mortgaged.
In this section, "cooling-off period" means the seven-day period starting on the day after the day every person entitled to disclosure in relation to a reverse mortgage loan has signed, before a person authorized to take affidavits under The Manitoba Evidence Act, a statement in prescribed form acknowledging receipt of the prescribed form to be provided to him or her under subsection (2).
A lender must provide, in the prescribed manner, to each person entitled to disclosure, a prescribed form that provides full and accurate disclosure of prescribed information regarding the loan. The prescribed form must be provided at least seven clear days before any borrower signs the reverse mortgage or any other document that obligates a borrower to sign the reverse mortgage.
If a reverse mortgage is signed by a borrower before the end of the cooling-off period,
(a) the borrower is not obligated to accept an advance of funds under the reverse mortgage loan or to sign a new reverse mortgage after the end of the cooling-off period; and
(b) unless funds have been advanced under the reverse mortgage loan, the lender must
(i) return the signed mortgage to the borrower, and
(ii) if the mortgage or any other document has been registered in a land titles or registry office, take all steps necessary to have the registration discharged at the lender's own cost.
Unless a judge orders otherwise under section 34, when a lender advances funds under a reverse mortgage loan where
(a) the reverse mortgage was signed before the end of the cooling-off period;
(b) no disclosure has been given by a lender as required under subsection (2); or
(c) there is a material error or omission in the information provided under subsection (2) by a lender;
the terms of the loan are deemed to be amended as necessary from the time that the funds are advanced, so that
(d) the total liability of all borrowers under the loan is limited to the unpaid balance of the funds advanced under the loan, less any portion of those funds that was used to pay a fee, penalty or cost for which no borrower is liable because of section 32;
(e) the amount calculated under clause (d) is due only
(i) when the term of the loan expires, if it is for a fixed term,
(ii) on the 120th day after the death of the borrower or, if there is more than one borrower, of the last of them to die, or
(iii) when any of the mortgaged property is sold or otherwise disposed of,
whichever occurs first; and
(f) the borrower may at any time prepay all or any part of the amount calculated under clause (d) without notice, fee or penalty.
A borrower who has paid an amount under a reverse mortgage loan for which he or she is not liable because of subsection (4), may set it off against the balance owing under the loan. If that amount exceeds the balance owing, the lender must refund the excess to the borrower or to his or her legal representative on written demand.
If a lender fails to have the registration of a reverse mortgage or any other document discharged as required by clause (3)(b) or, if subsection (4) applies, when the borrower's liability under the reverse mortgage loan has been fully discharged in accordance with that subsection, a judge of the Court of Queen's Bench may, on summary application by a registered owner of the land affected by the registration,
(a) order the registration to be discharged; and
(b) award costs, on a solicitor and client basis, to the owner.
On summary application by a lender or a borrower under a reverse mortgage loan, or by a borrower's legal representative, to a judge of the Court of Queen's Bench,
(a) the judge shall determine whether the lender provided disclosure as required under subsection 33(2);
(b) if the judge determines that the lender did not provide disclosure as required under subsection 33(2), the judge may make an order varying the application of subsection 33(4) or substituting any other terms or conditions for the loan that in his or her opinion would be just and reasonable if he or she concludes that it would not be just and reasonable in the circumstances for subsection 33(4) to apply;
(c) even if the judge determines that the lender did provide disclosure as required under subsection 33(2), if the judge is satisfied, having regard to all the circumstances, including whether or not the borrower received independent legal advice, that the terms of the loan are not just and reasonable, he or she may make an order varying the terms of the loan in any manner that in his or her opinion would be just and reasonable in the circumstances;
(d) the judge may order the lender to set off against the balance owing under the loan, or to refund to the borrower, any amount paid by the borrower for which he or she was not liable because of section 32, subsection 33(4) or the judge's order under clause (b) or (c); and
(e) the judge may make any order respecting costs or any other order he or she thinks fit.
In an application under subsection (1), the burden of proof to prove that the borrower was provided with disclosure as required under subsection 33(2) is on the lender.
An application under subsection (1) may be brought not later than six years after the registration of a reverse mortgage or other document has been discharged.
The director of the Consumer Protection Office or any person acting under the authority of the director is responsible for
(a) receiving and investigating complaints involving reverse mortgage loans; and
(b) mediating disputes involving reverse mortgage loans;
and in performing these duties has the powers, duties and protection given under sections 73, 92 and 135.1 to 135.5 of The Consumer Protection Act, with such changes as the circumstances require.
A person is guilty of an offence who
(a) fails to provide a borrower with the form required by subsection 33(2);
(b) provides a form required by subsection 33(2) which contains material errors or fails to disclose information required under that subsection;
(c) advances funds under a reverse mortgage loan where the reverse mortgage was signed by a borrower before the end of the cooling-off period;
(d) fails to refund an amount to a borrower as required by subsection 32(2) or 33(5); or
(e) fails to comply with clause 33(3)(b).
If a corporation commits an offence, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in, participated in or permitted the commission of the offence is also guilty of an offence and is liable on summary conviction to the penalties set out in clause (3)(a), whether or not the corporation has been prosecuted or convicted.
A person who is guilty of an offence under subsection (1) is liable on summary conviction,
(a) in the case of an individual, to a fine of not more than $20,000. or imprisonment for a term of not more than three months, or both;
(b) in the case of a corporation, to a fine of not more than $50,000.
A prosecution for an offence under this Part may be commenced not later than one year after the day on which evidence sufficient to justify a prosecution for an offence came to the knowledge of the director of the Consumer Protection Office.
The minister may make regulations
(a) enlarging or restricting the meaning of "reverse mortgage loan";
(b) prescribing for the purpose of subsection 33(1) the form and content of a statement acknowledging receipt of the prescribed form required by subsection 33(2);
(c) prescribing information to be provided under subsection 33(2), and the form and manner in which it is to be provided;
(d) respecting any other matter the minister considers necessary or advisable to carry out the purposes of this Part.
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