We often take instructions in an Estate, and the Executors tell us that their parents 'definitely' discharged the mortgage.

Then we ask for the original Certificate of Title and no one can produce it because there is still a mortgage, and the bank still holds the certificate of title.

There is a difference between paying off your mortgage and actually discharging it.



Make sure you actually discharge your mortgage

Once you pay off your mortgage you no longer owe the bank any money.  But preparing and filing the documents with the Department of Lands is an additional step and an additional cost that people sometimes don't take.

This will mean that the bank still has a mortgage over title and still holds the certificate of title.

That may not be a problem so long as only the deceased's name is on title, and the bank still exists.



Why does it matter?

It is a bit of extra time and paperwork but if the deceased person is the only person on title, and the bank still exists, then it isn't too much trouble.

It can become problematic if you are administering the Estate of the last surviving spouse (say your mother's estate), but both spouses are still on title (so both your mother and father are still on title).  This often means that Probate was not obtained for the older Estate, and so now the Executor has to obtain probate for that Estate.  This can be particularly problematic if there is a relative who has been cut out of one of the Wills, because in order to obtain Probate for the older Estate you need to advertise and that both Estates are potentially subject to challenge.

When the first spouse dies it is important to fully administer their Estate to avoid these sorts of problems.

The other problem we sometimes see with smaller banks is that bank no longer exists.  Usually some larger bank has bought them out, but it can be difficult for the new bank to locate the title.  Applying for a new Certificate of Title because the bank has lost it is a time consuming process, so adds both delay and costs.

If the mortgage has been paid off, make sure you go the extra mile and actually discharge the mortgage.



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