Mortgage Instructions Toolkit

House Key

HELPING RESIDENTIAL REAL ESTATE LAWYERS RESPOND TO LENDER INSTRUCTION REQUESTS

The Mortgage Instructions Toolkit is a practical resource for residential real estate lawyers in Canada. Over the last few years, lender instructions have increased in scope and lawyers may find themselves being pressured to give opinions and assume responsibility for matters outside their areas of expertise. The result is a significant increase in potential liability.

Although lenders’ title insurance policies are obtained in most residential mortgage loan closings, title insurance does not cover all elements of a residential transaction or resolve all difficulties with a lender’s instructions. The Canadian Bar Association’s Real Property Law Section is planning to work with the Canadian Bankers Association to seek improvements to problematic lender instructions in residential real estate transactions. Please send any issues you are facing with lender instructions to cbarealproperty@cba.org.

HOW TO USE THIS TOOLKIT

Prepared by the CBA Real Property Section, the practice tools in this toolkit can help you respond to some common lender instruction requests.

IN THIS TOOLKIT

Introduction

Access to the Property

Borrower identification requirements

Building compliance issues

Changing lender instructions

Conflicts of Interest - Lender

Conflicts of Interest-Vendor

Duty to inform lender

Easements and rights of way

Encroachments and other encumbrances

Independent Legal Advice

Insurance

Lender Intermediaries - NEW!

Opinions on title or title insurance

Practice of Law: Scope of work obligations - NEW!

Private water supply

Property Taxes - NEW!

Reliance on mortgage payout statements

Reporting - NEW!

Request for funds - NEW!

Responsibility to “ensure” or “certify”

Retention of mortgage documents

Searches

Septic tanks

Signing of borrowers - NEW!

Surveys

Title insurance coverage for legal services

Undertakings - NEW!

Western Conveyancing Protocol

Zoning - NEW!

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