Respecting the mortgage deed, much more than a matter of monetary clauses.
Many people believe that the obligations of a mortgage deed are limited to complying with monetary clauses such as the payment of property taxes, insurance premiums, condominium fees, and repayment of principal and interest.
Thus, an Owner, unable to refinance his property, sells it to Madame. On the same day, she places a mortgage on it. After a few years, Madame defaults on her payments and the creditor obtains a judgment following an application for forced abandonment and sale under judicial control.
The Owner who originally sold the property goes to Court* and requests a judgment retraction after offering to repay the creditor the late payments, excluding other fees. He claims to be the true owner of the property based on a verbal agreement with Madame. To support his claims, he asserts that in addition to making the last six payments and signing the leases, Madame and himself are designated as insured persons. In the meantime, failing to reach an agreement with the creditor, the Owner repurchases the property, assumes the creditor's mortgage, and registers the deed with the land registry.
The court rejects the Owner's claims and concludes that even if the arrears were paid, Madame would still be in default and could not remedy it. In fact, she transferred the property and "this transfer does not comply with the conditions [...] which notably require obtaining prior approval" from the creditor.
It is worth remembering that the majority of loan agreements require the creditor's acceptance of the property transfer, even in the case of a sale between spouses, related persons, or as part of a tax rollover. Your lender will remind you of this.
*CA 500-09-021920-111
