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Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

August 10th - 2010

LEGAL BEAT: Power of Sale

The lender started Ontario Power of Sale proceedings and sued the mortgagor-owner who defended on several grounds. None were found in the owner's favour.

The lender started Ontario Power of Sale proceedings and sued the mortgagor-owner who defended on several grounds. None were found in the owner's favour.

Dealing with allegations of an improper sale process the Court of Appeal said: "Regarding improvident sale, the appellant relies on her evidence that, while the April 2006 mortgage secured the principal amount of $364,000, the mortgagees listed the property in January 2007 for $346,900 and sold it six days later for $337,000. There are three reasons why this allegation does not raise a genuine issue for trial

First, while the mortgage was in the amount of $364,000, the mortgage advance was only $350,000, the balance being the impugned lenders' administration fee. Accordingly, the appropriate comparison is between the mortgage advance of $350,000 and the sale price of $337,000.

Second, the mortgagees provided substantial evidence about comparative sales that established, on their face, that the sale price fell within the range for this property.

Third, the appellant's only evidence that the mortgagees' sale price was unreasonable was based on comparative listings, not sales. There is an important difference between listings and sales.

Further, the appellant has failed to establish that the expeditious nature of the sale compromised the sale price obtained. Notably, the respondents received three offers, all of which fell within the same range, and accepted the highest bid."

Xceed Mortgage Corporation v. Evans, 2008 ONCA 175

MERV'S COMMENTS
We may see more of such cases depending on the housing market, the credit concerns and mortgage activity.

Ontario REALTORS® should review OREA's seminar Power of Sale, and also the questions and answers on OREA's Legal Forum under Topic "Mortgages", Subtopics "Selling/Buying under Power of Sale" and “Mortgage Remedies”. An OREApedia topic on Mortgage Remedies–Power of Sale will be available soon.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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