Court Of Appeal Clarifies When Mortgagees Must Issue A New Notice Of Sale

The Ontario Court of Appeal recently clarified a mortgagee's obligations when seeking to exercise its power of sale rights under the Mortgages Act. The Court of Appeal held that the provisions of the Act dealing with notices of sale and mortgage statements should be read together, and a timely, accurate, and complete mortgage statement could serve to correct an inaccurate notice of sale. This outcome is in line with the practical realities of power of sale proceedings and should be of interest to commercial lenders in Ontario.

Disclosure requirements under the Mortgages Act

When a mortgagee seeks to exercise a power of sale, it becomes subject to two important disclosure requirements under the Mortgages Act. First, section 31 requires the mortgagee to provide a notice of sale to every person appearing to have an interest in the mortgaged property. The notice of sale must include information identifying the property, the mortgage, and the amounts due, and it must prescribe a date by which the mortgagee will sell the property if the amounts due are not paid.

Section 22(2), meanwhile, allows a mortgagor to obtain from the mortgagee a mortgage statement...