As a real estate lawyer, one of the most frequently asked questions that I receive relates to the removal of a mortgage from the title of a property once the owner has fully paid it off.

Many homeowners assume that once they complete their mortgage payments or pay out a lump sum to their lender/refinance to pay off the outstanding balance, there is nothing further to be done or follow up on. The reality is that even if you have paid all outstanding amounts on your mortgage, it will remain outstanding on the title of your property until a “Discharge of Charge” is registered.

Institutional lenders such as TD Bank, Scotiabank, and RBC usually have internal discharge departments whose responsibility it is to register the Discharge of Charge once they have confirmed receipt of full payment of the mortgage. Typically, they will get this completed within a few months of payout, but sometimes there can be long delays due to internal backlogs, and sometimes it falls through the cracks entirely and they do not attend to it until the homeowner or their real estate lawyer contacts them to follow up.

How do you know when to follow up? If you have paid off your existing mortgage directly with the bank and have not involved a real estate lawyer, then you should follow up with the bank within a few months of payout and request a copy of the Discharge of Charge. This document serves as confirmation that the mortgage no longer remains outstanding on your title. If you instead completed a refinance with your real estate lawyer and they directed the proceeds of the new mortgage to pay out your existing mortgage, then you will want to follow up with your real estate lawyer as the bank will be sending them the Discharge of Charge at some point after the payout is complete. If your lawyer does not receive it within a timely manner, they will follow up with the bank.

If you are dealing with a private lender rather than an institutional lender, the process differs from what is noted above. Your real estate lawyer must obtain the Discharge of Charge from the private lender’s lawyer straight away once the private mortgage is paid out – there are no delays here.

Outstanding discharges can cause delays and unforeseen issues for homeowners. You may come to refinance or sell your property at a future date and find that your old mortgage remains on title, and obtaining the Discharge of Charge may cause delays, especially if it is a very old mortgage. In some cases, the outstanding mortgage may be so old that the bank no longer exists, or in the case of a private mortgage, the lender may be long deceased. In this scenario, the homeowner will have a tedious problem on their hands. Once you have paid out any mortgage, stay on top of it and ensure that you receive confirmation of the discharge.

If you have any questions, feel free to reach out to a lawyer at Kormans LLP.