assignment of rents canada

What is an Assignment of Rents?

WHAT IS AN ASSIGNMENT OF RENTS?

An assignment of rent is a binding contract between a lender and a borrower stipulating that in the event the borrower defaults on the mortgage, the lender will be entitled to collect any rent payments made by a tenant occupying the property. If the lender is aware that the borrower intends to use the mortgaged property as a rental property, the lender may include an assignment of rents clause in the mortgage agreement to further protect its interest. A lender may choose to enter a general assignment of rents or a specific assignment of rents.

In a general assignment of rents, the agreement is binding on all future leases. A specific assignment of rents is only binding on the specific parties listed in the agreement. In the context of a real estate transaction, an assignment of rents, whether general or specific, may be registered on title. An assignment of rent may also be registered under the Personal Property Security Act as a secured interest. An assignment of rents is typically only deleted from the title when the corresponding mortgage is discharged and paid in full.

Contact us if you require legal assistance with your real estate transaction. Our real estate law team has the experience and knowledge to assist you throughout every step of the transaction.

Disclaimer: The information contained in this article is not to be construed as legal advice. The content is drafted and published only for the purpose of providing the public with general information regarding various real estate and business law topics. For legal advice, please contact us.

About the Author:

Shahriar Jahanshahi is the founder and principal lawyer at Jahanshahi Law Firm with a practice focus on representing business star-ups and investors in the province of Ontario. For further information about Shahriar Jahanshahi, click here .

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Assignment of Rents

What you need to know about Assignment of Rents and Leases

A lender may ask you to sign an assignment of rents agreement, but what is this? Should you agree to this?

In this piece, we give you a quick overview into what an assignment of rents is whether you should agree to this.

What is an Assignment of Rents?

An assignment of rents reserves the lender the right to collect rent payments (if being rented out) when a borrower defaults on their loan payments. The lender using certain clauses can also take over the lease and dealing with the tenant. However, both the borrower and lender must agree to this.

The assignment of rents is registered on the property alongside the mortgage/loan. This means that once the mortgage is discharged from the property, so is the assignment of rents.

General vs Specific Assignment of Rents

There are two main types of assignments of rents, general and specific. A general assignment of rents allows for the creditor to collect rent but not under a specific lease. This assignment therefore applies to all present and future rental income/leases.

On the other hand, a specific assignment of rents applies to leases that are specifically listed in the document. If any of the specific/listed leases expire or are terminated, the specific assignment of leases will not apply to any new lease/sublease.

In most situations, the lender will prefer a general assignment of rents as it is a more comprehensive additional security.

Signing an assignment of rents is standard practice for rental properties and protects the lender if you default. If you’re interested in what an assignment of rents agreement looks like, click here to see an example of an Assignment of Rents from the Land Registry of Ontario.

If you have any questions on the assignment of rents, feel free to contact our office at 905 787 2296 or [email protected] .

Assignment of Rents in Residential Real Estate Transactions

When discussing a mortgage product with your broker, you will be required to disclose certain information so that the mortgage may be crafted in accordance with your specific needs. As part of this task, you will be required to disclose whether the property will be your primary residence or an investment. Where borrowers own a property that is or may be leased in the future, most lenders will require that either a general assignment of rents or a specific assignment of rents be secured against the borrower’s property in addition to the secured mortgage.

In most cases, lenders will have borrowers execute the general or specific assignment of rents in a form of a separate document however, some lenders choose to incorporate an assignment of rents clause within the mortgage agreement itself. Even if the mortgage document is silent about assigning rents, the lender’s right to receive rental income will be inserted into the mortgage as incidents of ownership (the retainment of the right to collect rent). Both the general and specific assignment of rents provide a degree of financial protection for a lender as both entitle them to collect rental income from the borrower’s tenant(s) if the borrower defaults on the mortgage.

The specific assignment of rents applies where the lender is only interested in a specific lease(s). This arrangement may be appropriate in situations where a property has one tenant under a long-term lease or where multiple lenders are taking security in a particular property and wish to divide specific leases and income derived from each. Once such a lease(s) expires or terminates, the lender will no longer be entitled to any rental income from subsequent new leases.

On the opposite end of the spectrum is the general assignment of rents . Once implemented, not only does it give the lender the right to rental income from current or future tenants and leases but it also provides the lender with the ability to exercise all of the rights of a landlord under any prevailing or new leases, assignments, or subleases. This type of arrangement is a more popular choice with lenders as it provides synoptic security.

Like a mortgage, both general and specific assignment of rents are usually registered against title to a property as a notice under s. 78 of the Land Titles Act [1] .

I hope that this article has provided you with some helpful information. If you have any questions, please do not hesitate to contact me at [email protected] .

[1] R.S.O. 1990, c. L.5

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Maximize Your Property's Potential: Navigating Assignment of Rents with Ease

In the realm of real estate financing, especially when it comes to securing private loans or second mortgages, property owners might encounter a term that sounds complex but is crucial in the lending world: the Assignment of Rents. This agreement can be a pivotal factor in obtaining the financial leverage needed for investment or operational purposes. Let's demystify this legal document, explore why it's often a prerequisite in certain lending scenarios, and outline its advantages and disadvantages.

What is an Assignment of Rents?

An Assignment of Rents is essentially an agreement between a property owner (the Assignor) and a lender (the Chargee) where the former assigns their right to collect rents from a property to the latter as security for a loan. This doesn't transfer ownership of the property but grants the lender specific rights over the rental income and, to some extent, lease management.

Why is it Needed?

This arrangement is particularly common in private lending and when securing second mortgages. In these cases, lenders seek additional security beyond the physical asset of the property itself. Since these lending scenarios often involve higher risks or are structured as bridge financing, the Assignment of Rents provides a lender more direct access to income generated by the property, enhancing the loan's security.

The Pros of an Assignment of Rents

Enhanced Loan Approval Chances : Offering direct access to rental income can make it easier for property owners to secure loans, especially in high-stake situations like second mortgages or private lending.
Financial Flexibility : It allows property owners to leverage their existing assets to obtain the financing they need for further investments or to manage cash flow effectively.

The Cons of an Assignment of Rents

Reduced Control Over Rents : Property owners give up some control over their property's income, which might impact financial planning and operations.
Potential for Lender Intervention : In cases of default or if certain conditions are triggered, the lender might step in to collect rents directly, which could affect tenant relationships.

Navigating the Assignment of Rents with Expertise

Given the complexity and the significant implications of an Assignment of Rents agreement, it's paramount for property owners and investors to approach this legal tool with a clear understanding and strategic foresight. Here's where expert legal counsel comes into play.

At Nungisa Law, we specialize in real estate, business law, and wills and estate law, offering comprehensive legal services tailored to your unique needs and circumstances. Our team is adept at navigating the nuances of Assignment of Rents agreements, ensuring that our clients not only understand their obligations and rights but also strategically position themselves for financial success.

Whether you're considering private lending options, securing a second mortgage, or exploring ways to leverage your property's income for financing, we're here to provide the guidance and support you need. Our approach is to humanize your legal interactions, ensuring that your legal journey is not just successful but also relatable and understandable.

If you have questions about Assignment of Rents or need expert legal advice on your real estate financing strategies, contact Nungisa Law today. Our mission is to partner with you in your legal journey, ensuring your success is our success.

Don't navigate the complex waters of real estate financing alone. Let Nungisa Law be your guide and partner in making informed, strategic decisions that align with your goals. Email us at [email protected] , we're happy to help.

#RealEstateLaw #AssignmentOfRents #PrivateLending #SecondMortgages #LegalAdvice #NungisaLaw

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A banker asked us: General vs specific assignments of rents and leases in Ontario

Q: What is the difference between a general assignment of rents and leases and a specific assignment of rents and leases, and when should I include them in my term sheet for a commercial real estate financing of an Ontario property?

A: In situations where a borrower owns real property in Ontario that either is or will be leased to third party tenants, a lender should consider obtaining either a general assignment of rents and leases or a specific assignment of rents and leases in addition to a mortgage on the secured property. Like a mortgage, an assignment of rents and leases should be registered against title to the subject property, and in addition, should be registered under the applicable personal property security legislation as the rents and leases that are being secured by the assignment fall within the definition of personal property under that legislation. [1]

An assignment of rents and leases, be it a general assignment of rents and leases or a specific assignment of rents and leases, provides a lender with two principal benefits which may be realized by the lender after an event of default:

it permits the lender to receive the rent payments that the borrower/landlord would otherwise be entitled to, and this revenue stream from the tenants is a significant asset that should be secured; and,
it permits the lender to step into the shoes of the borrower/landlord and exercise all of the rights and remedies available to the landlord to ensure that the full benefit and value of the lease is realized by the lender, which includes for example, the right to demand payment in the event of non-payment of rent by a tenant and to assign the lease to a purchaser in the event of a power of sale proceeding.

The only difference between a general assignment of rents and leases and a specific assignment of rents and leases is the revenue streams and leases to which they apply. A general assignment of rents and leases applies to all present and future rental income and leases in respect of a particular property. Once in place, a general assignment of rents and leases gives the lender a right to the rental income and the ability to exercise all of the rights of the landlord under a lease in respect of all leases of the property, including but not limited to any new leases, subleases or assignments of lease entered into after the assignment is granted and registered. In contrast to this, a specific assignment of rents and leases only applies to leases which are specifically listed in the document. In the event that any of the specifically listed leases expire or are terminated, and/or a new lease or sublease is put in place, the specific assignment of leases will not apply to this new lease or sublease and the lender will have no right to the rental income or rights resulting from the new lease or sublease.

In most lending situations, the lender will prefer a general assignment of rents and leases as it provides the most comprehensive security. The lender will have security over all rental income, and be able to exercise the rights of the landlord, regardless of who the tenants are in the future, or what leases the borrower has in place at the time of default under the terms of the loan or credit facility. However, where there is a principal or anchor tenant that represents a preponderance of the rental income, and/or the borrower objects to a general assignment of rents and leases securing all rents and leases as too broad a security interest, the lender may only be interested in securing the rental income and landlord rights associated with a specific principal or anchor lease, or a particular group of leases. In such a situation, a specific assignment of rents and leases may be a reasonable compromise position for a lender to adopt. Alternatively, in situations where multiple lenders are taking security in a particular parcel of real property, specific assignments of rents and leases allow the various lenders to divide the rental income and leases among themselves, with each lender only obtaining security in a specifically agreed upon lease or group of leases.

The above is a general overview of general and specific assignments of rents and leases. The professionals in Gowling WLG (Canada) LLP’s financial services practice group would be pleased to discuss your lending and real property security needs in greater detail, and help you chose the security documents most appropriate for your lending needs.

[1] Some financial institutions have chosen to incorporate into their Standard Charge Terms for their mortgages various provisions that serve as a general assignment of rents, and they do not register a separate general assignment of rents as a result.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.

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Assign to a new tenant

Question & Answer

Another legal way to move out early is to assign your place to a new tenant.

Assigning means that the new tenant replaces you and takes over your rental agreement. The amount of rent and all other details of the agreement stay the same. You are not responsible if the new tenant causes damage or owes rent. But when you assign, you do not have the right to move back in later.

You must ask your landlord for permission to assign. It is best to ask in writing and keep a copy of your request. Your landlord must answer within 7 days.

If your landlord agrees to let you assign, they are allowed to charge you a fee. The fee can't be more than your landlord had to spend on things like a credit check, and advertising if the landlord found the new tenant.

Your landlord can refuse to let you assign to a particular person if there is a good reason. For example, if the person caused problems for a landlord in the past, such as damaging property or not paying rent.

Write a letter asking to assign

Use this tool to write a letter to your landlord asking if you can assign your unit.

If your landlord won’t let you assign to anyone

If your landlord won't let you assign at all or does not give you an answer within 7 days, you can move out with 30 days' notice .

To do this, give your landlord a Tenant’s Notice to End the Tenancy (Form N9) no later than 30 days after you asked for permission to assign.

In this situation, the usual rules about the timing of your notice do not apply. You can choose any termination date , as long as it is at least 30 days after the day you give your landlord the notice.

You can mail or fax the notice, or give it to your landlord in person. You can also give the notice to your landlord's agent. An agent can be someone who works for your landlord, for example, the superintendent or someone who works in the property manager's office.

NOTE: If you mail the notice you must do this 5 days before the day you need to give it to your landlord.

You might not have a right to assign if you live in

subsidized housing
a superintendent's unit
housing provided by a school where you work or are a student

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Assignment Of Rents In Alberta

home, house, rent, landlord, tenant, Alberta, law, assignment, rents, lender, bank, Land Titles Office, mortgage, payments, default, lender, private, funding, land title, fee, condo unit, parking stall, registration, discharge, drafting, registration, notice, borrower, payment

When people buy a home, or even after they owned their home for some time, they sometimes see an assignment of rents registered on the title to their property. While this raises concerns for many people, a registers assignment of rents remains a normal part of many real estate transactions. Keep reading to learn, the details of these registrations. In the event that you have further questions, please reach out to us. With offices in both Calgary and Edmonton, Kahane Law Office offers full support for all your real estate law needs.

What Is An Assignment Of Rents

An assignment of rents is a document registerable at the Alberta Land Titles Office. Its purpose is to allow a bank or mortgage lender to collect rents in the event a landlord / property owner fails to make their mortgage payments. Essentially, the lender serves notice on the tenants. The notice tells them that the borrower failed to make their mortgage payments. The tenant must then pay their regular rent payment to the lender directly. A tenant only has the requirement to pay, if the assignment is registered on title and they receive notice. Failure to make the payments to the lender then cause legal and financial consequences for the tenant.

When Lenders Use Assignment Of Rents Used

Several situations arise for when lenders require assignment of rents. For example, in almost every situation where a lender lends money for a mortgage on a rental property , the lender requires one. Next, private lenders lending money on a principal residence frequently require one, in the event that the owner decides to rent out the property. A private lender is an individual or smaller company that lends funds privately. These often make up loans to individuals not able to qualify with a regular mortgage lender. Lastly, many lenders lending on commercial transactions require an assignment of rents. If you want to know if your lender requires one, then simply ask. Your banker or mortgage broker has the ability to find out if your situation requires one.

The Cost Of An Assignment Of Rents

The costs associated with an assignment of rents include two components. Firstly, the lawyer drafting the assignment of rents for the lender charges a fee for this service. With almost all lenders, the costs of the lender’s lawyer fees are paid by the borrower. Often the cost for the preparation of this document is about $200 to $400. Next, the second part of the cost involves the land title fee for the document registration. While land title fees change, the cost is currently under $50. Remember, if your property is made up of more than one title, such as a condominium unit with a separate title parking stall, a registration fee applies to all titles with the mortgage.

Discharging The Registered Document

When a person sells a house, or payout out a mortgage, a discharge of the assignments is required. The process for discharging the assignment of rents is usually simple. In most cases, it “falls off” when the mortgage that it is for is discharged. In the event that land titles leaves it on title, the discharge process remains simple. Often a letter or request to discharge works to remove it. Again, this simple removal process only exists if the associated mortgage no longer appears on title. If the mortgage remains on title, then the discharge requires the consent of the lender to ensure they remain protected.

Risks To Buyers

The risk to a buyer of a property with an assignment of rents on title is nominal. In essence, the registration should be removed then the seller’s lawyer discharge their mortgage. Your lawyer ask the lawyer for an undertaking (a lawyer promise binding on the lawyer) to discharge it. If the lawyers forget about it and land title accidentally leaves it on, then the buyer needs to see to its removal. As above, the process for removing it is easy and very low cost in most situations. This is not a registration on title that raises any red flags for a buyer.

How Alberta Lawyers Help With Assignment Of Rents

Understanding real estate law is an important aspect of home ownership. The real estate lawyers at Kahane Law Office help with assignment of rents in many ways. For example, we assist clients with:

Drafting assignment of rents;
Reviewing registrations (including these ones) on title with clients;
Helping lenders (mainstream and private) with mortgages requiring these registrations;
Discharging the registration from the land title to a property; and lastly
Serving notice and collecting on the assignment when a borrower fails to make payment.

Help With Assignment Of Rents

Our team of real estate lawyers and real estate litigation lawyers help clients with all aspects of assignment of rents. If you are a borrower or lender, call and we provide you with the assistance you need. Kahane Law Office prides itself in it exceptional level of client service and explains all aspects to you so you understand your specific situation. If you are in the Calgary and surrounding area, please call 403-225-8810 . Alternatively, if you live in the Edmonton or surrounding area, please reach us at 780-571-8463 . Lastly, while we enjoy phone calls with clients, email often makes the initial contact easier. It allows us to provide you with more information quicker. Please use this email to connect today.

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Subletting and assigning tenancies

Natural disasters and tenancy

Tenant rights

A sublet is when a tenant moves out of their rental unit and allows someone else to live there temporarily. An assignment is when a tenant finds someone to take over their tenancy agreement. Tenants need written permission from the landlord to sublet a rental unit or assign a tenancy agreement.

Landlord responsibilities

Landlord rights.

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A sublet is when a tenant temporarily moves out of their rental unit and rents their unit to another tenant (subtenant) until they return. The original tenant must sign a new tenancy agreement (a sublease) with the subtenant.

Landlords and sub-tenants don't have a contractual relationship

When a sublet happens, the original tenant becomes the sub-tenant's landlord. The sub-tenant has the same rights and obligations outlined in the original tenancy agreement.

An assignment is when a tenant permanently moves out and transfers their tenancy agreement to a new tenant. This usually happens when a tenant wants to get out of a fixed-term tenancy early.

The original tenancy agreement still applies

When a tenancy is assigned, the new tenant takes on all the rights and responsibilities of the original tenancy agreement. For example, if the original tenancy agreement had a no pet clause, the new tenant would not be allowed to get any pets.

The new tenant and the landlord can also agree to new terms or sign a new agreement.

Learn more about tenancy agreements

Sublets and assignments are conditional

Tenants can only sublet or assign a tenancy if:

The tenant has the landlord's written agreement

A tenant must have their landlord's written permission before subletting or assigning their tenancy. A landlord can't unreasonably refuse a sublet or assignment if there are six months or more remaining on the tenancy term.

The tenant has an order

Tenants can sublet or assign their tenancy if they have an order from the Residential Tenancy Branch (RTB) allowing them to do so.

The tenancy agreement allows sublets

Tenants can sublet or assign their tenancy unless it is prohibited in the tenancy agreement. Subsidized housing providers often don't allow for subletting or assignment of tenancies.

Tenant responsibilities

Tenant and subtenants must sign a sublease .

The original tenant must sign a sublease agreement with the new tenant during a sublet.

The original tenant becomes the subtenant's landlord

The original tenant becomes the sub-tenant's landlord when a sublease agreement is signed. The sub-tenant has the same rights and obligations as the original tenancy agreement. The sub-lease agreement must align with the original tenancy agreement.

Subletting without written permission can lead to eviction

If a tenant sublets or assigns their tenancy without their landlord's written permission, the landlord may serve notice to end the tenancy . This means the tenancy would also end for the subtenant, unless they negotiate a new tenancy agreement with the landlord.

Tenants can seek dispute resolution to allow sublets or assignment

If a landlord refuses a request to sublet or assign a tenancy, tenants can seek dispute resolution if they believe the landlord is being unreasonable. Dispute resolution is a process to help resolve conflicts between landlords and tenants.

Landlords should agree to sublets or assignments

Landlords can't unreasonably refuse a sublet or assignment of a fixed term tenancy if there are six or more months left in the term.

Refusal can lead to dispute resolution

If a tenant requests a sublet or assignment and a landlord reasonably believes that the person won't be able to follow the terms of the tenancy agreement, the landlord can refuse the request. However, the tenant can then seek dispute resolution if they believe that the landlord have unreasonably refused their request.

Landlords can conduct checks on new tenants

Landlords are entitled to ask for information such as credit or reference checks on a potential new tenant. If it appears the potential tenant will not be able to follow the terms of tenancy agreement, a landlord can refuse the request.

Note: Landlords must not charge a potential tenant for considering, investigating, or consenting to an assignment.

Policy guidelines

19: Assignment and sublet (530KB)

Previous legal decisions

Learn more about past residential tenancy investigation decisions

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In the Media

Occupancy rules: Guests, roommates, subtenants and lease assignments – Ontario housing law basics

August 23, 2023

The information on this page outlines rules, renters’ rights and landlords’ responsibilities as laid out in Ontario housing laws such as the Residential Tenancies Act, the Human Rights Code and the Housing Services Act.

Usually, a landlord cannot stop a tenant from hosting guests in their rental unit. In regular tenancies, a tenant has the right to welcome any guest that the tenant wants to visit them in their unit, and for any period of time. If a landlord tries to control which guests a tenant can invite into their home, this may be considered harassment or discrimination .

However, there are some limits to hosting guests. For example, a tenant is responsible for damage that their guests cause to the rental property or if their guests interfere with the landlord’s or other tenants’ interests in or enjoyment of the rental property. A tenant may also be responsible if they allow anyone to commit any illegal acts at the rental building. In these cases, a landlord will sometimes give a tenant’s guest a trespass notice. Although the tenant is still allowed to have that guest visit them in their own unit (if they want to), that guest is not allowed to go anywhere else in the rental property.

In subsidized or Rent-Geared-to-Income (RGI) housing, the guest policies vary but tenants are normally not allowed to have long-term guests and there is normally a limit on the number of days that a tenant can host a guest. For more information on guest policies in subsidized housing, a tenant should consult the policies set out by their landlord.

Typically, a landlord cannot raise rent or charge extra fees when a tenant hosts a guest. Ontario’s Residential Tenancies Act (RTA) prohibits landlords from collecting any refundable or non-refundable fees, except for a previously agreed upon key deposit and/or last month’s rental deposit. However, if a guest damages property, the tenant who invited that guest may be responsible to pay for the damage.

The rules for tenants in Rent-Geared-to-Income (RGI) housing are different. Each RGI housing provider must have a guest policy which allows guests, but the policy will have limitations on how long a guest may visit. Violating a guest policy in RGI housing could result in a rent increase. For more information on guest policies in RGI housing, a tenant should consult their housing provider’s policies.

Roommates, occupants, and shared facilities

A roommate or occupant is a person who has not signed a lease, but who lives in the rental unit with the permission of the tenant. Typically, a landlord cannot raise rent or charge extra fees when a tenant adds a roommate or occupant. Ontario’s Residential Tenancies Act (RTA) prohibits landlords from collecting any refundable or non-refundable fees, except for a previously agreed upon deposit for keys and/or one month’s rent. However, if a guest damages the rental property, the tenant who invited the guest may be responsible for the damage.

The rules for tenants in Rent-Geared-to-Income (RGI) housing are different. A tenant must inform their RGI housing provider if they would like to have a person staying with them for longer than the housing provider’s policies allow. If the RGI housing provider agrees to allow the tenant to add a roommate, the tenant will likely be required to provide information about the roommate to the RGI housing provider, and their rent will likely increase. Violating these policies in RGI housing could result in a rent increase. Tenants should consult their RGI housing provider’s policies for more information about guest policies.

Some municipalities set by-laws for the minimum amount of floor area required for each person living in one room. A landlord can apply to evict a tenant for overcrowding a unit if a rental unit has so many occupants that the unit is overcrowded. A tenant should consult their municipal by-laws for more information on what constitutes overcrowding.

The protections for tenants under Ontario’s Residential Tenancies Act only apply to certain types of situations when the facilities of a unit are shared by multiple people.

Generally, RTA protections apply to a tenant who rents a bedroom and shares all other facilities of a unit with other tenants who all have their own leases.

RTA protections do not apply to a tenant who shares a kitchen or a bathroom with the person they rent from – which could include their landlord or another tenant who is the lease holder – or with an immediate family member of the landlord.

In any situation where a tenant shares facilities with other people, they should seek legal advice to confirm whether the protections of the RTA apply to them. Tenants can also consult Community Legal Education Ontario’s (CLEO) resource for more information about their rights in specific housing situations.

Tenants who rent a bedroom and share facilities – and who are protected by the RTA – should be aware that:

Shared amenities like kitchens, living rooms and bathrooms are considered common areas. If a landlord would like to access these areas, they do not need to provide the tenants with a written notice at least 24 hours before would like to enter the unit. However, the landlord would have to provide 24 hours written notice to enter the tenant’s bedroom.
If a landlord rents bedrooms within a unit to different tenants under separate leases, it is unlikely that the tenants will have input on who the landlord permits to live in the other bedrooms.
These living arrangements are often called rooming houses. Rooming houses are not permitted in many municipalities. If the municipality learns about a rooming house, for example because someone makes a maintenance complaint to the municipality’s by-law enforcement office, the municipality may order the property owner to stop operating the property as a rooming house. This can put the tenants at risk of eviction. The LTB does not consider whether a unit is permitted, and maintenance complaints can be made to the LTB even when a unit is not permitted in a municipality.

Subletting

In Ontario’s Residential Tenancies Act (RTA), subletting happens when a tenant transfers their entire rental unit to another person or group – known as a subtenant – for a specific period of time, and then the tenant later returns to resume living in their unit, and the subtenant moves out. The original lease agreement between the tenant and the landlord remains in effect. This means that the tenant remains responsible to the landlord for paying rent. Typically, a subtenant pays rent to the original tenant during the subtenancy. However, even if the subtenant pays the landlord directly, the tenant is still ultimately responsible for ensuring that the rent is paid to the landlord. The tenant is also responsible for any damage that the subtenant causes to the unit.

There are some restrictions on subletting a unit. For example, a sublet agreement must specify the time period for the subtenancy. This means that a subtenancy cannot go month-to-month like a tenancy can. Furthermore, a tenant must leave the rental unit while allowing a subtenant to live in the unit. There is no sublet relationship if a tenant does not leave the rental unit while allowing another person to live in the unit. If the tenant lives in the unit at the same time as another person, then that other person is an occupant or a roommate. Read more about the differences between a sublet, an occupant, and a roommate .

The Residential Tenancies Act (RTA) requires a tenant to get their landlord’s permission to sublet their unit. However, a landlord is not allowed to “arbitrarily” or “unreasonably” stop a tenant from subletting the unit. If a landlord refuses to allow their tenant to sublet their unit, the tenant can apply to the Landlord and Tenant Board (LTB) to determine whether the landlord arbitrarily or unreasonably refused to allow them to sublet.

If a tenant gives possession of the rental unit to another person without the landlord’s consent, the sublet agreement is not valid at the LTB and the person who has taken possession could be evicted by the landlord.

Rent-Geared-to-Income (RGI) housing policies normally prevent a tenant from subletting their unit. If an RGI housing provider prohibits subletting, and a tenant sublets their unit anyway, the tenant could be evicted. Tenants who live in RGI housing should consult their housing provider’s policies for more information on subletting.

A tenant who sublets their unit is still entitled to all the benefits of their tenancy agreement , and they also still hold all the responsibilities of that agreement with their landlord. The tenant is also responsible to ensure that their subtenant upholds all the responsibilities of the tenancy agreement with the landlord . For example, t his means that the tenant is responsible to ensure that the rent is paid to the landlord , and the tenant can apply to evict their subtenant if the subtenant fails to pay the rent.

During the subtenancy, t he subten ant is entitled to the benefits ou tlined in the sublet agreement a s well as in the RTA . The subtenant is also accountable for any responsibilities described in their sublet agreement that do not conflict with the RTA . Typically, landlords do not have any responsibilities towards the subtenant. However, the landlord continues to have responsibilities towards the tenant when that tenant sublets the rental unit. For example, a landlord should continue to maintain the unit and make repairs during a subtenancy . A subtenant can inform the tenant or the landlord of repairs that are needed.

Lease assignments

A tenant can “assign” their lease to another person. When a lease is assigned to another person, the original lease agreement ends and a new lease agreement begins. The new lease agreement is between the new tenant (or “assignee”) and the landlord.

As a result, the original tenant (or “assignor”) will no longer have a right to occupy the unit. The original tenant will not owe any rent that is due after the date that the assignment begins. All of the rights to the unit and the obligations to the landlord become the responsibility of the new tenant. The details of the lease remain the same, including the type of lease (yearly, monthly, weekly, daily, or fixed-term), any included amenities or services, and the amount of rent owed.

As noted above, if a tenant chooses to sublet their unit, the lease agreement between the original tenant and the landlord continues. The sublet agreement creates a relationship between the tenant and the subtenant. The tenant becomes the subtenant’s landlord. Often, the subtenant pays rent to the tenant and the tenant pays rent to the landlord. If the subtenant is late paying their rent, the tenant will still owe the landlord that rent.

If a tenant chooses to assign their lease, the new tenant’s lease agreement replaces the original tenant’s lease agreement. The original tenant will owe the landlord rent up until the day before the start date of the assigned lease. At the start date of the assigned lease, the new tenant will owe the landlord rent, and the original tenant will not owe any more. Once the new tenant’s lease begins, the original tenant has no remaining rights to the unit. For example, the original tenant cannot move back into the unit at the end of the new tenant’s assigned lease.

Section 95 of the RTA describes the rules about lease assignments.

A tenant must ask for their landlord’s approval to assign their lease. Usually, the tenant is also responsible for finding a new tenant (the assignee) to take over the lease. However, there are some circumstances where the landlord may want to choose the assignee, for example from their building’s waiting list.

It is up to the tenant to decide whether to ask for their landlord’s approval first and then try to find an assignee, or whether to find an assignee first and then ask for the landlord to approve the assignment and the potential assignee at the same time. Keep in mind that a landlord may refuse to allow the lease assignment and/or refuse to approve a particular assignee suggested by the tenant.

If a landlord refuses to allow a tenant to assign their lease, the tenant may choose to continue living in the unit and keep their original lease agreement. However, if the tenant would still like to move out, they may end their tenancy by giving the landlord an N9 form called “Tenant’s Notice to End the Tenancy”. The tenant must provide this notice within 30 days of the landlord’s refusal, and they must provide the landlord with at least 30 days’ notice before they intend to move out.

A landlord has seven days to respond to a tenant’s request to assign their lease. If the landlord has not replied within seven days, the tenant then has 30 days to give the landlord an N9 form to end their tenancy. The tenant must provide the landlord with at least 30 days’ notice before they intend to move out.

If a landlord consents to a tenant’s request to assign their lease but does not approve the specific assignee chosen by the tenant, the tenant can apply to the Landlord and Tenant Board (LTB). The landlord is not allowed to “unreasonably” or “arbitrarily” refuse an assignee chosen by the tenant. However, if the landlord has a good reason to refuse the request, the tenant will have to find a different assignee.

If the LTB agrees that the landlord “unreasonably” or “arbitrarily” refused to consent to a particular assignee, the LTB may order that the landlord agree to the assignee, that the landlord agree to a different assignment suggested by the tenant, or that the lease agreement between the tenant and landlord be terminated. If a tenant finds themselves in this situation, they should get legal advice about their options.

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Assignment of Rents – What, Why, and How?

Article by:

Madelaine prescott, esq., share this post:.

November 29, 2023

These days, almost all commercial loans include an Assignment of Rents as part of the Deed of Trust or Mortgage. But what is an Assignment of Rents, why is this such an important tool, and how are they enforced?

An Assignment of Rents (“AOR”) is used to grant the lender on a transaction a security interest in existing and future leases, rents, issues, or profits generated by the secured property, including cash proceeds, in the event a borrower defaults on their loan. The lender can use the AOR to step in and directly collect rental payments made by the tenant. For an AOR to be effective, the lender’s interest must be perfected, which has a few fairly simple requirements. The AOR must be in writing, executed by the borrower, and recorded with the county where the property is located. Including an AOR in the recorded Deed of Trust or Mortgage is the easiest and most common way to ensure the AOR meets these requirements should it ever need to be utilized.

When a borrower defaults, lenders can take advantage of AORs as an alternative to foreclosure to recoup their investment. With a shorter timeline and significantly lower costs, it is certainly an attractive option for lenders looking to get defaulted borrowers back on track with payments, without the potential of having to take back a property and attempting to either manage it or sell it in hopes of getting your money back out of the property. AORs can be a quick and easy way for the lender to get profits generated by the property with the goal of bringing the borrower out of default. But lenders should carefully monitor how much is owed versus how much has been collected. If the AOR generates enough funds so that the borrower is no longer in default, the lender must stop collecting rents generated by the property.

Enforcement of an AOR can also incentivize borrowers to work with the lender to formulate a plan, as many borrowers rely on rental income to cover expenses related to the property or their businesses. Borrowers are generally more willing to come to the table and negotiate a mutual, amicable resolution with the lender in order to protect their own investment. A word of warning to lenders though: since rental income is frequently used to pay expenses on the property, such as the property manager, maintenance, taxes, and other expenses, the lender needs to ensure they do not unintentionally hurt the value of the property by letting these important expenses fall behind. This may hurt the lender’s investment as well, as the property value could suffer, liens could be placed on the property, or the property may fall into disrepair if not properly maintained. It is also important for lenders to be aware of the statutes surrounding the payment of these expenses when an AOR is being used, as some state’s statutes require the lender to pay certain property expenses out of the collected rents if requested by the borrower.

In addition to being shorter and cheaper than foreclosure, AORs can be much easier to enforce. In California, the enforcement of an AOR is governed by California Civil Code §2938. This statute specifies enforcement methods lenders can use and restrictions on use of these funds by the lender, among other things. Under CA Civil Code §2938(c), there are 4 ways to enforce an AOR:

The appointment of a receiver;
Obtaining possession of the rents, issues, profits;
Delivery to tenant of a written demand for turnover of rents, issues, and profits in the correct form; or
Delivery to assignor of a written demand for the rents, issues, or profits.

One or more of these methods can be used to enforce an AOR. First, a receiver can be appointed by the court, and granted specific powers related to the AOR such as managing the property and collecting rents. They can have additional powers though; it just depends on what the court orders. This is not the simplest or easiest option as it requires court involvement, but this is used to enforce an AOR, especially when borrowers or tenants are uncooperative. Next is obtaining possession of the rents, issues, profits, which is exactly as it seems; lenders can simply obtain actual possession of these and apply the funds to the loan under their AOR.

The third and fourth options each require delivery of a written demand to certain parties, directing them to pay rent to the lender instead of to the landlord. Once the demand is made, the tenant pays their rent directly to the lender, who then applies the funds to the defaulted loan. These are both great pre-litigation options, with advantages over the first two enforcement methods since actual possession can be difficult to obtain and courts move slowly with high costs to litigate. The written demands require a specific form to follow called the “Demand To Pay Rent to Party Other Than Landlord”, as found at CA Civil Code §2938(k). There are other notice requirements to be followed here, so it is essential to consult with an experienced attorney if you are considering either of these options. California Civil Code §2938 specifically provides that none of the four enforcement methods violate California’s One Action Rule nor the Anti-Deficiency Rule, so lenders can confidently enforce their AORs using the above methods with peace of mind that they are not violating other California laws.

Whether you are looking to originate a new loan, or you are facing a default by your borrower, understanding what an Assignment of Rents is and how it operates can be extremely beneficial. Enforcing an AOR can be an easier option than foreclosure and can help promote a good relationship with your borrower when handled correctly. If you have any questions about AORs, or need further details on how to enforce them, Geraci is here to help.

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ASSIGNMENT OF LEASES, RENTS, NON DISTURBANCE AND ATTORNMENT: How To Differentiate Between Them

Date Posted: July 23, 2010 By Jeff Levy, HBSc, MBA, CFA, AMP, JD

The argument of Canada Life in the Goodyear case was that the assignment of future leases from Angeles to Canada Life operated to create privity of estate between Canada Life and Goodyear from day one. This was rejected by Madame Justice McKinley on the basis that the only way privity of estate could be created between Canada Life and Goodyear was if the reversionary interest of Angeles in the property was transferred to Canada Life, which could only occur after a foreclosure.

In this context, Madame Justice McKinley also dealt with the situation where a lease is absolutely assigned by the owner of land but the reversionary interest in the land is not transferred to the assignee. Though it is not clear how the owner of land could keep the reversionary interest while assigning absolutely the benefit and obligations under the lease to a third party, Madame Justice McKinley commented that if that was possible there would be no privity of estate between the assignee and the non-assigning party since the reversionary interest remained in the landlord. The point is that privity of estate can only apply between the parties who hold the estate or interest in the land, the fee simple and the leasehold estates. Further on, at page 336, Madame Justice McKinley stated:

“To the extent that he may have inferred that an absolute assignment of leases would have created privity of estate between the lessor and the mortgagee, I would not agree, unless that absolute assignment amounted to an assignment of the lessor’s reversionary interest in the land.”

Choses in Action

To understand the concepts arising out of assignments of rents, to follow some of the case laws in this area, and to comprehend the impact of Section 53(1) of The Conveyancing and Law of Property Act , it is necessary to understand what a chose in action means. It is a right arising out of a contract, which is enforced by the courts. However, a chose in action is not a physical thing, such as real property, chattels or equipment. It is basically every right or promise set out in a contract, such as a non-physical benefit or right.

There are two kinds of choses in action, legal and equitable. A legal type is a chose in action which was enforced by common law courts prior to the amalgamation of common law and equity courts. The equitable type is a chose in action which was enforced by the courts of equity before the amalgamation of common law and equity courts. The equitable chose in action is a promise or benefit arising out of a trust or fiduciary relationship. If a beneficiary had a trustee to convey an asset, such as real property, to it in certain circumstances, the right or benefit to have the asset conveyed to the beneficiary from the trustee would be an equitable chose in action. For this reason, the courts of equity always permitted an equitable chose in action to be enforced by assignees.

On the other hand, an assignment of rents is a legal chose in action. Traditionally, common law courts did not permit a legal chose in action to be enforced by assignees, and this created the doctrine of privity of contract. Thus, historically, an assignment of rents could not be enforced by the lender. To enable an assignee to enforce a legal chose in action, to get the benefit of the rents, the courts of equity intervened so that the assignor or the landlord/borrower could enforce the contract on behalf of the assignee, also known as the lender. Then, the assignor would in effect operate as a trustee for the assignee, which required a two-step litigation process. Firstly, the assignee would bring a claim in the courts of equity for an order requiring the assignor to enforce the contract. Secondly, with that order in hand, the assignee would ask the assignor to sue in the common law courts. Then, the legal chose in action in favour of the assignor would be enforced by common law courts and the doctrine of privity of contract would remain intact.

With the amalgamation of common law and equitable courts, these distinctions were eliminated and the courts permitted the assignee to sue the non-assigning party directly. It was introduced in Ontario following Section 53(1) of The Conveyancing and Law of Property Act and changes in the Rules of Practice. Section 53(1) states that a legal chose in action is enforceable by an assignee provided that

1) It is an absolute assignment and not a collateral assignment for security;

2) The assignment is in writing; and

3) Notice has been given to the non-assigning party.

Subject to these conditions, the assignee can enforce the contract on the non-assigning party. There are also Rules of Practice for assignees to proceed against a non-assigning party for recovery of a chose in action. Actually, the assignee can sue in its own name and not in name of the assignor. When the assignor retains a right of re-assignment, the assignor has to be a party to the claim because it continues to have a residual right in the chose in action.

Considering that an assignment of rents given as collateral security is not an absolute assignment, the lender cannot sue for rents until it becomes absolute. It becomes so when there is a default by the landlord/borrower and the lender takes steps to enforce the assignment of rents by taking possession, appointing a receiver, or demanding the rents through an attornment of rents.

Attornment Agreement vs. Non Disturbance Agreement

The differences between an attornment agreement and a non disturbance agreement are brought out in the Goodyear case. Both of them create privity of contract between the lender and the tenant, but a non disturbance agreement is one sided. It says that if the tenant pays rent to the lender, the lender will not kick the tenant out, but it cannot force the tenant to pay rent to the lender. Should the lease be first and the mortgage second, then the lender can take possession and ask the tenant for rent as either an agent of the landlord or as a mortgagee in possession. The lender can also do so upon acquiring the reversion through foreclosure or sale. The lender can attorn rents and the tenant has to pay rent to the lender. Should the lease be after the mortgage, then the Goodyear precedent is that:

1) The lender can ask the tenant to leave;

2) The tenant can leave on its own volition;

3) Should the lender allow the tenant to stay and the tenant stays, then:

(a) If the terms of the tenancy are not agreed upon, the tenant is an annual tenant on the same terms as the original lease; and

(b) If the parties agree on a different tenancy, then that agreement prevails.

4) If the tenant remains and does not pay rent, it does so at the sufferance of the lender; and

5) If the tenant stay put without any agreement, but the lender accepts rent, then an annual tenancy is created.

Know your legal rights as a tenant or a landlord. For more information about renting in Toronto, and how you or your business can use Ontario law to your advantage, contact the lawyers at Levy Zavet PC ( Levy Zavet ) in Toronto, Ontario.

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A Banker Asked Us: General vs Specific Assignments Of Rents And Leases In Ontario

Contributor.

it permits the lender to receive the rent payments that the borrower/landlord would otherwise be entitled to, and this revenue stream from the tenants is a significant asset that should be secured; and,
it permits the lender to step into the shoes of the borrower/landlord and exercise all of the rights and remedies available to the landlord to ensure that the full benefit and value of the lease is realized by the lender, which includes for example, the right to demand payment in the event of non-payment of rent by a tenant and to assign the lease to a purchaser in the event of a power of sale proceeding.

1. Some financial institutions have chosen to incorporate into their Standard Charge Terms for their mortgages various provisions that serve as a general assignment of rents, and they do not register a separate general assignment of rents as a result.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Assignment of Rents In Alberta

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As of 2020, Canada’s rental, leasing and property management industries were estimated to be worth around $120.5 billion . Real estate is a rapidly growing sector, and several factors contribute to this growth. If you’re looking to get into this vast market, there are a few things you need to understand.

When it comes to transactions as complex as the assignment of rent in Alberta, it’s best to seek the advice of experienced lawyers . Complex legal issues can come into play in a real estate deal, and having a lawyer who knows the law inside and out can make all the difference.

In this article, we’ll take a closer look at what the assignment of rents in Alberta entails and provide insight for landlords and tenants so that they can navigate this process.

What does the assignment of rents mean?

In the province of Alberta, an assignment of rent is a document that allows mortgage lenders and banks to collect rent if the borrower fails to pay. A general assignment of rents applies to all tenants who live in the property, while a specific assignment of rents applies only to particular tenants.

The assignment of rents is a document that can be registered at the Alberta Land Titles Office , ensuring that the lender has the legal right to collect the amount of rent in the event of delinquency. Landlords and tenants need to understand the implications of this agreement and seek legal advice if necessary.

A lessee, who is the person that has rented the property, must pay the month-to-month rent even if the owner of the property has changed. Most rental agreements require this, and new tenants that move in have to abide by it. If the property owner has changed, the new owner may need to know the existing covenants between the tenant and the previous owner. Lessees can also sublet or assign a rental property if they have the landlord’s consent. Sublease contracts are a great way to earn back money on any rental property. They are usually set for a fixed amount of time and are generally governed by the original rental agreement.

The new owner, however, must contact or give a written notice of landlord to the lessee when they move into the rental premises to remind them of their obligation to continue paying rent. If the tenant fails to do so and has unpaid rent, the property owner has reasonable grounds for the lessee’s eviction. Failure to pay rent before the termination date is a substantial breach of any residential tenancy agreement. Delinquencies during the term of the lease can lead to lawsuits, which are very stressful and expensive.

If the new owner wants to impose a rent increase, they should provide written notices to the lessees. Both landlords and tenants must understand their rights and responsibilities under an assignment of rents agreement. You should speak to a lawyer if you have questions or require dispute resolution. A lawyer can assist both parties in negotiating a fair and beneficial agreement.

How much does it cost?

When it comes to the assignment of rents in Alberta, one of the most important aspects is the lawyer’s fees, which is what the lawyer charges for their services in drawing up and reviewing the agreement. It’s important to remember that this is a separate fee from the cost of changing the land title.

It’s a good idea to shop around for a lawyer who offers a fair price for their services. Ask for quotes from several lawyers, and ensure you understand what’s included in their fees. It’s also important to note that only a few lawyers offer the same level of service. Some may be more experienced in real estate law than others. Therefore, it’s critical to do your research before choosing one.

If a property has multiple titles, there may be a registration fee, which Alberta charges to update the property’s land registry. This fee, which is separate from the lawyer’s service fee, can vary depending on the number of registered titles.

What are the different types of assignments of rent in Alberta?

There are two types of assignment of rents in Alberta: the general assignment of rents and the specific assignment of rents.

A general assignment of rents applies to all tenants who are living in the property, while a specific assignment of rents applies only to particular tenants. Both landlords and tenants must understand the differences between these two types of assignments.

The general assignment of rents is a document that allows mortgage lenders and banks to collect rent if the borrower fails to pay. This type of assignment applies to all tenants who are living on the property. Both the landlord and the tenant need to understand their rights and obligations under this agreement.

On the other hand, a specific assignment of rents is a document that allows mortgage lenders and banks to collect rent from particular tenants. This type of assignment applies only to those tenants who are specified in the agreement.

What Lawyers Can Do To Help

Lawyers can help you review registered titles, complete the registration process, draft the assignment of rents documents, serve notices and collect payment of rent from delinquencies. They can also provide you with other legal services related to property management, such as protecting your rights as a tenant or a landlord and helping resolve disputes.

If you’re a renter, it’s important to have a lawyer review your lease agreement so that you know your tenant’s rights and obligations. Likewise, if you’re a landlord, it’s important to have a lawyer draft an assignment of rents agreement so that you can collect rent from your tenants.

For example, if you have any problems with your rental property, such as condominium units, mobile home sites, or houses, it’s important to have a lawyer by your side who can resolve the situation. Lawyers can provide legal advice, help the parties negotiate a dispute, and represent you in court as well.

Did you know?

The Residential Tenancies Act (RTA) Handbook of Alberta is valuable for tenants and landlords. It provides detailed information on all aspects of tenancy law in Alberta, including rights and responsibilities, mediation services, and enforcement measures. The RTA handbook is available online or in print form.

Let Us Help You With Your Assignment of Rents

Dealing with real estate involves many legal issues and technicalities that can be quite daunting to navigate. Whether you’re a tenant or a landlord, having an experienced lawyer facilitate the process is the greatest thing you can do. Hiring a lawyer saves you countless hours of reviewing documents and laws. Some law firms may even offer an online case evaluation , meaning you don’t have to leave the comfort of your own home.

If you’re in Canada and are looking to get into real estate, having a seasoned real estate lawyer by your side is very important. One law firm that stands out from the rest is Diamond & Diamond Lawyers . They offer their services across various cities in Canada, such as Calgary, Edmonton, Vancouver, Toronto, Ottawa, and much more. Therefore, hiring a lawyer from Diamond & Diamond to handle real estate transactions is something your future self will thank you for.

Handling a case that involves an assignment of rent requires a deep understanding of laws in Alberta. Contact us if you have any questions or need legal advice.

Faqs on assignment of rents in alberta, what is an assignment of the lease.

An assignment of lease is a document that allows a tenant to transfer their rights and responsibilities under a lease agreement to another person. This is very helpful if the original tenant can’t live in the property anymore because, for example, they’re moving out of the province or the country.

The assignee must satisfy all requirements the original tenant met, including being approved by the landlord. The assignor (the person transferring the lease) must also leave the property in good condition and continue to meet all of its obligations under the lease agreement.

If you’re interested in transferring your lease agreement to another person, consulting a lawyer is very important so that you understand the process and your rights and responsibilities.

How is it different from an assignment of rent?

The assignment of rents is a document that allows a landlord to collect rent from particular tenants in case of unpaid rent. This type of assignment applies only to those tenants specified in the agreement.

On the other hand, the lease assignment is a document that allows a tenant to transfer their rights and responsibilities under a lease agreement to another person. This document can be helpful if the original tenant can’t continue to live in the rental property.

Moreover, not only does an assignment of lease apply to all tenants on the lease, it can also transfer a periodic tenancy to someone else. However, an assignment of rents does no such thing.

Is there a risk for the buyer who wants to purchase property with an assignment of rent?

Yes, there is. If the tenant assigned to pay rent doesn’t do so, the landlord can take legal action against the tenant. However, if the tenant assigned to pay rent doesn’t live in the property anymore, the landlord might not be able to collect rent from that tenant.

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This glossary defines vocabulary and terms used on this website.

Administrator

A statutory decision maker under LOTA, and an employee of the LTSA, responsible for the general administration of LOTA and its regulations.

An adult in a Power of Attorney is an individual who is 19 years of age or older.

Air Space Parcel

A volumetric, three-dimensional parcel that has upper and lower limits in addition to horizontal (side) limits contained within a single land parcel. May or may not be occupied in whole or in part by a building or other structure. May exist on, above, or below the surface and have any sort of shape as long as sufficiently described in an air space plan and complies with General Survey Instruction Rules (GSIR).

(a) The person named on a land title form as the person acquiring an interest in land. (b) The person named as applicant in the application section is the person with whom land title staff is authorized to communicate with regarding an application.

Application

A request submitted to the land title office for the registrar to discharge a statutory duty, including: registration of a transfer, charge, or lien; cancellation of a registered interest in land; and issuance of a certificate.

Assignment of Rents

A charge registered against title allowing a lender to collect rent directly from a tenant if there is a default under a mortgage.

Assurance Fund

Either of the two funds established under Part 19.1 (LTSA Assurance Fund) or Part 20 (Government Assurance Fund) of the Land Title Act , from which claimants suffering loss, damage or deprivation of an estate or interest in land as set out in these Parts is compensated.

The LTSA Assurance Fund is maintained and administered by the LTSA and covers claims relating to losses occurring after the creation of the LTSA; the Government Assurance Fund is maintained and administered by the Province of BC and covers claims relating to losses incurred prior to the creation of the LTSA.

An attorney in a Power of Attorney is a person appointed to act on behalf of another. Evidence of this appointment is by way of a Power of Attorney.

Building Scheme

A building scheme is a set of restrictions or requirements that are imposed on the owner or leaser of a property, usually to enhance the value of the property.

Cadastral Fabric

Includes information such as property boundaries, survey monuments, legal documents, maps and regulations that support registration of lands.

Caveat is a warning to beware; lodged on title to prevent further dealings with the land.

Certificate of Pending Litigation

A certificate of pending litigation (CPL) is registered against land to give notice of a court action where someone claims an estate or interest in land or, as the result of another enactment, has a right of action in respect of land.

An interest in land (less than the fee simple estate) or encumbrance that is registered on the title by the LTSA’s land title office. Charges typically fall into these categories:

Statutory rights of way (SRWs)
Judgments filed in support of debt/tax collection
Claims of Builders Lien

Claim of Builders Lien

A Claim of Builders Lien is an interest registered against land to secure payment for labour or materials. Once filed it remains on a property owner’s title for one year and can interfere with selling the property or securing financing.

Filing a Claim of Builders Lien does not guarantee payment. If you are the lien claimant, it is your responsibility to inform the property owner and to enforce the lien if payment or settlement is not forthcoming. You will require the help of a legal professional.

Generally, the deadline to file a lien is 45 days after the project is completed. For more information, consult the Builders Lien Act .

The claimant is the person or corporation to whom the money is owed.

Common Property

That part of the land and buildings shown on a strata plan that is not part of a strata lot. Each strata lot includes ownership of a fractional share of the common property within the strata property, proportional to the ratio of the area of that strata lot to the total area of all strata lots.

A transfer of an estate or interest in land (other than by will) to a new owner through sale, lease, or other means. A transfer of title is the conveyance of an estate or interest in land in exchange for some financial consideration, typically a sale.

In British Columbia, there are generally two types of covenants which are noted as charges on a Land Title:

Covenants or restrictive covenants – must be “negative” obligations restricting what an owner can do on the lands and, similar to easements, there must be a dominant (benefited) lands and servient (burdened) lands.

Section 219 covenants – which can impose both positive and negative obligations and can only be registered for the benefit of certain local and provincial governments. There is no requirement for a dominant tenement for s219 covenants.

A debt due to the Crown or to the provincial government.

Crown Grant

A legal instrument by which Crown lands are transferred to private registered owners in fee simple. The Crown grant document contains a sketch and usually refers to a plan showing the location and extent of the parcel granted. The Crown grant includes description of the terms and conditions of the land grant. When a Crown grant is issued, an initial title for the property is registered in the land title register in the name of the person receiving the grant. The LTSA has a copy of most Crown land grant dispositions issued by the various Crown agencies. Almost all BC Crown land grants are available online in electronic form. The LTSA also retains other types of Crown grants, including mineral Crown grants, Taxation Act grants and timber grants.

Land owned and administered by a government, either federal or provincial. In British Columbia, Federal (Canadian) Crown land includes National Parks, Indian Reserves, federal ports and military bases. Provincial Crown land includes provincial parks and all ungranted land (wilderness) within the provincial boundaries. Most of British Columbia is Crown land.

Crown Land Registry

A registry that records all lands administered by the government of British Columbia and records the purchase and sale of those lands and interests in them.

A defect is a reason why an application for the registration of an interest in land cannot be registered, as determined by an Examiner of Title. The term is also used to describe the state of an application that has been the subject of a Notice Declining to Register (i.e., being “in defect”).

Demised Premises

A property or a portion of a property that has been leased to a tenant.

Determinable Fee Simple

An interest in land that is granted to a person and heirs, but subject to a qualification that will end the interest upon the occurrence of a defined event.

Disclosure Statement

Also known as the affidavit of assets and liabilities, it is part of the documentation needed for probating a will.

A document refers to any of the land title forms or supporting material (including survey plans) which are submitted as part of an application to register an interest in land within British Columbia. Examples include: title transfers, mortgages and easements.

Duplicate Certificate of Title

A duplicate of the official certificate of title maintained in the land title register. The issuance of any duplicate certificate of title operates to prevent certain types of transactions on title (e.g., a transfer) from occurring until the duplicate certificate of title is surrendered back to the land title office.

A limited right attached to land (the dominant tenement) for the benefit of the owner of dominant tenement to use land of the owner of servient tenement. An example of an easement would be a driveway crossing one owner’s land (the servient tenement) to provide access to another owner’s land (the dominant tenement).

Encumbrance

A judgment, mortgage, lien, Crown debt or other claim to or on land created or given for any purpose registered against a title. See also Charge.

Estate in land

The two main types of estate are:

Freehold estate: Results in ownership and possession of land for an indeterminable period of time. The most common freehold estate is fee simple, absolute ownership limited only by Crown rights and encumbrances noted on the title. A life estate is another form of freehold that entails possession of the land for the duration of a person’s life.
Charge: An estate or interest in land that is less than fee simple, such as a lease, which is the possession of land for a specific period of time, as defined in the lease.

Examination

The process of determining the registrability of a document or plan (or package of documents / applications). To put it in general terms, the examination determines whether a proposed transaction is acceptable.

Examiner of Title

LTSA employees authorized to conduct examination, registration and/or filing of documents and plans and update of records in the land title register. Liaison examiners are examiners of title who work in the Customer Service Centre. Prior to becoming examiners of title, employees must successfully complete an internal land title examination course and pass a series of exams.

Fee Simple is the form of ownership of real property (real estate) in which the owner has the right to control and transfer the property at will.

Fee Simple Estate

Highest form of real estate ownership; the estate is unconditional, unlimited and perpetual.

Fee Simple on Condition

An interest in land that is subject to a defined condition.

An instrument prescribed under legislative or regulatory authority, including land title forms established by the Director of Land Titles. A form may be used as an application, instrument, or supporting document. An electronic form of instrument is the electronic equivalent of, and has the same legal effect as, a traditional paper instrument. Forms are also prescribed by the Surveyor General. All major forms have electronic and manual versions available online.

Freehold Estate

Exclusive right to enjoy the possession and use of a parcel of land for an indefinite period.

Indefeasible Title

The title granted to a person as a registered owner under the Land Title Act ; an indefeasible title is conclusive evidence, as against the Crown and all other persons, that the person named in the title is indefeasibly entitled to an estate in fee simple to the land described in the title, subject only to certain exceptions set out in s. 23(2) of the Land Title Act .

Index Books

Index books are part of the LTSA’s collection of historical records. They are hardcopy ledgers and registers that contain references, notations and entries about land title interests and surveys for individual parcels.

Various index books were created throughout the years to fulfill record keeping, create cross-referencing capability, meet document retrieval needs and facilitate historical record preservation. Some continue to be used for historical and legal research.

A charge that is registered on more than one title.

Interest Holder

A beneficial owner of a relevant trust, a corporate interest holder of a relevant corporation, or a partnership interest holder of a relevant partnership.

Interest in Land

a life estate in land;
a right to occupy land under a lease that has a term of more than 10 years;
a right under an agreement for sale to occupy land,
or require the transfer of an estate in fee simple.

Joint Tenancy

A form of co-ownership of interests in land in which the ownership is acquired at the same time and where each owner has an equal interest and equal rights to possess the land. Under the Property Law Act , neither consent of, nor notice to, other owners in joint tenancy is required to sever the joint tenancy. Upon the death of one owner, the interest of the deceased joint tenant passes to the surviving joint tenant(s).

A court order or decree by the Federal Court of Canada, Court of Appeal, Supreme Court or Provincial Court or a judge of those courts by which usually money is payable to any person which entitles that person to register the order in the land title office.

An enactment that provides the statutory framework for the administration of Crown land, establishes the responsibilities of government Ministers regarding the administration of Crown land and provides for the delegation of certain authorities. Many powers have been delegated to the Surveyor General with respect to Crown land definition and disposition.

View the Land Act (link is external) .

Land Owner Transparency Act

The Land Owner Transparency Act was passed by the government of British Columbia in May 2019. The first-of-its-kind in Canada, it created an accessible registry of beneficial interests in land in B.C. – the Land Owner Transparency Registry.

Land Owner Transparency Registry

A publicly searchable registry of information about beneficial ownership of land in British Columbia. Beneficial owners are people who own or control land indirectly, such as through a corporation, partnership, or trust. The registry is intended to end hidden ownership of land in BC. The Land Owner Transparency Registry launched November 30, 2020 and opened to public search on April 30, 2021. For more information, visit LandTransparency.ca

Land Survey Act

An enactment that establishes the general guidelines for the conduct of legal surveys in the province and includes specific authorities of the Surveyor General with respect to certain survey practices.

View the Land Survey Act (link is external) .

Land Title Act

A comprehensive 400-section statute that prescribes the legal program under which the land title system operates, the Land Title Act designates:

The Director of Land Titles to regulate land title practice.
The Registrar(s) of Land Titles as the primary statutory decision maker(s) in the administration of the land title system.

The Land Title Act establishes the land title register and requirements respecting its operation and records.

View the Land Title Act (link is external) .

Land Title and Survey Authority Act

The enactment that establishes the LTSA as a not-for-profit corporation, governed by a Board of Directors for the purpose of managing, operating and maintaining the land title and survey systems of BC, facilitating the execution of Crown grants, and carrying on other necessary or advisable activities; additionally, the LTSA is established the operate a land title system for a First Nation under a FNCIDA agreement.

Under the Act , the Board is responsible for overseeing the strategic direction and governance of the LTSA, and is authorized to appoint the Chief Executive Officer who in turn is authorized to appoint the Director of Land Titles, the Surveyor General and the Deputy Surveyor General(s).

View the Land Title and Survey Authority Act (link is external) .

Land Title Practice Manual

A reference book for land title staff, conveyancing professionals and all others who make applications to the LTSA.

Land Title Register

That part of the records of the land title office, including electronic records, where information respecting registered indefeasible titles is stored. It is independently maintained by the LTSA under the statutory authority of the registrars of land titles and in accordance with the requirements of the Land Title Act respecting permanent records retention.

Land Title Vault

Physical repository of land title records and other related documents. Direct access to original land title and survey records is limited to LTSA employees and those with direct access privileges including land surveyors, historical researchers and registry agents.

A contract that grants exclusive possession of a property for a set period of time.

The interest that is held by a tenant under a Lease.

Legal Advice

Legal advice is the giving of a professional or formal opinion regarding the substance or procedure of the law in relation to a particular factual situation. It is distinguished from legal information, which is the reiteration of legal fact.

Legal Description

A unique identifier for each parcel of land in the province. It is a text description that may include lot number, plan number, survey system identifiers (Range, Block, Township, District Lot, District, etc.) and other text.

Legal Notations

Information recorded against a title to land following the receipt of an application concerning matters other than ownership of interests in land, such as statutory restrictions on use (such as the application of a heritage designation bylaw) or rights relating to other land (such as the existence of an appurtenant easement on the title of adjacent land).

Legal Surveys

A survey of land carried out by a land surveyor for the purpose of establishing legally enforceable boundaries. High quality cadastral surveys complement the integrity of the Province’s land title system and are also critical in defining other important boundaries that the Surveyor General is responsible for overseeing; including mine sites, oil and gas well-sites, public roads, pipeline and utility corridors, protected areas and First Nation treaty settlement areas.

The party to whom the lease is granted, also known as the tenant.

The party who grants the lease, also known as the landlord.

Letters of Administration/Grant of Administration

If no will was left by the deceased, certain individuals are eligible to apply for a grant of administration in order to handle the estate. If successful, the person who is named as administrator is legally able to distribute the estate.

A grant of administration can also be used to assign an administrator if:

The deceased did not name an executor
The executor has died since the will was made and no alternate executor was named
The executor gives up the right to apply to the court for probate

An interest in land claimed to secure the payment of a debt or the performance of some other obligation. Examples include Claim of Builders Lien for payment of debt related to labour or materials, Certificate of Lien for payment of strata fees, or Tax Act Liens for payment of various taxes.

Life Estate

Occupy and use property for the duration of the property owner’s life.

The act of recording a pending land title application against an affected parcel(s) in the land title register to record the time, date and nature of the application(s) and to provide notice of the pending application(s).

An interest in land granted by the registered owner (the mortgagor) to a lender (the mortgagee) as security for a debt.

A lot, block or other area in which land is held or into which land is subdivided.

Parcel Identifier (PID)

A nine-digit number that uniquely identifies a parcel in the land title register of British Columbia. The registrar assigns PID numbers to parcels for which a title is being entered in the computer register as a registered title. The Land Title Act refers to the PID as the permanent parcel identifier.

Pending Applications

An application that has been received by a land title office, time and date stamped and is awaiting registration or filing.

Personal Representative

The person who administers the estate of a deceased person as executor or Court-appointed administrator.

Plan (Survey) – Land Title Act

A graphical representation of a survey conducted by a BC land surveyor which shows the spatial extent, area, corner monuments and generally the geographic location of a specific area of land for the purpose of:

Establishing the boundaries of a new parcel of titled land; e.g. Subdivision Plan, Strata Plan, Reference plan pursuant to Section 99(1)(c), (f), (g) and (h).
Defining an area of land that is being dedicated to the public or to close an area that has been so dedicated, e.g. road, park or land returned to Crown. Re-establishing a corner or angle of an existing parcel of titled land, e.g. posting plan. Registering a charge against title to land affecting a portion of land within a title, e.g. Easement, Covenant, Lease, and Statutory Right of Way.

Land title examiners examine survey plans affecting all privately-held land under the Land Title Act.

Plan (Survey) – Surveyor General Division

A graphical representation of a survey conducted by a BC land surveyor that shows the extent, area, corner monuments and generally the geographic location of an area of untitled land, more specifically being:

A parcel as defined pursuant to the Land Act
An interest pursuant to the Mineral Tenure Act
An interest pursuant to the Coal Act
A wellsite location pursuant to the Oil & Gas Activities Act
The reposting of a corner of any of the above

Additionally a plan may be a graphical description of a Park or Protected area which is not based upon a survey by a BC land surveyor, and finally, the boundaries of a park or protected area as surveyed by a BC land surveyor.

Posting Plan

A plan showing one or more posts set to define or redefine an exisitng parcel of land.

Power of Attorney

A Power of Attorney is a document under which a person or corporation grants to a person or corporation the power to act as one’s agent or attorney. In order to use a Power of Attorney for land title purposes, the Power of Attorney must be filed with the Land Title Office. Section 51, Land Title Act , provides this requirement. For more information, review the Power of Attorney Act under www.bclaws.ca (link is external)

Priority Agreement

A Priority Agreement is a notation on a Land Title where one chargeholder has chosen to grant priority over its prior registered charge to a subsequent chargeholder.

Privately-Held Land

Land that has been granted and is owned by private individuals or corporations and is registered in the land title register.

Property Transfer Tax

A tax paid when one purchases or gains an interest in property that is registered at the land title office. The provincial Ministry of Finance is responsible for administering the Property Transfer Tax (PTT). If you require assistance or a copy of the form, please contact the Ministry of Finance, Property Transfer Tax Section. Consult the Ministry’s webpage (link is external) .

Registered Owner

A registered owner is the person who owns an interest in land, either in terms of ownership of title in fee simple, or ownership of a charge. A registered owner is recorded in the land title register upon registration.

An official keeper or recorder of records. Each Land Title Office has a Registrar of Land Titles, to find your nearest registrar, contact us .

Registrar’s Caveat

A caveat lodged by the Registrar to prohibit dealing with the land.

Registration

The act of recording the ownership of, or interests in, land in the land title register.

Registration Number

The unique serial number assigned to each entry in the Land Title Register.

The cancellation of a charge or legal notation on title. For example, when a mortgage has been paid off, the mortgage endorsement is released from title. Also known as a discharge.

Relevant Corporation

A corporation or limited liability company. However, does not refer to a corporation or limited liability company that is (a) referred to in Schedule 1 of LOTA, or (b) added by regulation to Schedule 1 of LOTA.

Relevant Partnership

A general, limited, limited liability, professional or foreign partnership within the meaning of the Partnership Act.

Relevant Trust

An express trust, bare trust, or prescribed trust.

Reporting Body

Owned by a corporation
Owned by a partnership, or
Being held in a trust.
A relevant corporation, a trustee of a relevant trust or a partner of a relevant partnership that is required to file a transparency report under LOTA.

Right of Way

A right to have access to land for a specific use, often granted to a municipality or utility company in order to provide and maintain services to parcels of land (such as underground cables or pipelines).

The entity that established a trust.

Sketch Plan

A preliminary plan.

State of Title Certificate

A formal statutory certificate issued upon request, certifying the current state of a title. The State of Title Certificate is a document that is issued by the land title office giving evidence of ownership of title and all particulars concerning registered interests in that title as at the date and time of its issuance. The State of Title Certificate is issued electronically or as a hardcopy document.

Statutory Right of Way

A statutory right of way is a right created by section 218 of the Land Title Act . SRWs allow a public agency to access a private property. This agreement grants the right to use a portion of the property to install and maintain infrastructure needed for the delivery of a specific service or services.

Strata Lot (Bare Land)

A lot created under the Strata Property Act not comprised of part of a building but with an interest in common property.

Strata Lot (Building)

A lot comprised of part of a building with an interest in common property. Commonly known as a condominium or townhouse.

Subdivision

The division of land into two or more parcels, generally by deposit of a subdivision plan.

An individual who is authorized to electronically sign electronic applications, electronic instruments, electronic instruments, electronic plan applications or property transfer tax returns.

Surveyor General Vault

Physical repository of plans, field Notes, Crown grants and other related documents for the province of BC. It holds hard copies of Crown grants, E&N Railway Plans, Oil and Gas Activities Act Well Site Plans, Dominion Township Plans, Land Act Plans, Railway Plans, Indian Reserve Plans, Mineral Tenure Plans, etc.

Tenants in Common

Land held as tenants in common must be distributed in accordance with the wishes of the deceased set out in a will or, where there is no will, in accordance with the Wills, Estates and Succession Act .

Depending on the context in which it is used title means, on the one hand the right of ownership of land and, on the other, the instruments or evidence of such right. In the register, title to land evidences fee simple ownership of land in one or more Registered Owner(s). Also referred to as land title and indefeasible title. A title may also refer to the ownership of interests in land less than fee simple, such as a mortgage or easement.

Title Search

A record issued by the land title office setting out the particulars of a title to land generated from information contained in the register at a specific point in time.

The voluntary act of a registered owner of an interest in land transferring that interest to another person, typically as a consequence of a sale or gift of the land to that person. The term includes a conveyance, a grant and an assignment.

An individual or corporation to whom an interest in land is transferred.

An individual or corporation transferring an interest in land to another party.

Transmission

A change of ownership of land consequent on death, sale under execution, order of court or other act of law, or on any testamentary settlement or legal succession in the case of intestacy.

Undersurface Rights

An interest in something that lies below the surface of the land.

Web Filing Form Practice Guides

Web Filing Form Practice Guides offer comprehensive practice information for completing land title Web Filing forms.

The act of withdrawing an application before it is registered, either voluntarily or in response to having received a Notice Declining to Register.

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89001 Deletion - Assignment of Rents

Bulletin information:.

Issue Date: May 22, 1989 Legislation: Land Titles Act , Registry Act

Bulletin content:

Under both registration systems, a chargee may include in a cessation of charge a discharge of an assignment of rent (general or specific) or notice thereof.

In order for these assignments or noticed to be deleted from the parcel register or abstract index, the Land Registrar need only ensure that the instrument number of the assignment is correct and that the assignment is in favour of the discharging chargee.

Land Registrars may also delete such assignments or noticed notwithstanding that they are not mentioned in the cessation of charge. The Land Registrar must be satisfied that the cessation of charge in fact operates as either a re-assignment of rents or a discharge thereof and that the assignment or notice is in favour of the discharging chargee, ie. a) the assignment must provide that a discharge of the mortgage acts as a discharge of the assignment or a re-assignment, or b) the assignment must provide that it is collateral to the mortgage. In both cases, the mortgage must be identified by number.

This Bulletin supersedes all previous ruling and rescinds Bulletin 87009. The Land Registrar may apply these rules to deleted assignments and notices collateral to mortgages previously discharged.

Original signed by:

R. Logan, Director of Land Registrations R. Blomsma, Director of Titles

Lobby group pushes B.C. party leaders to repeal rent restrictions

Short-term rental owners try to make frustration over their rent restrictions an election issue.

Social Sharing

An Airbnb listing for a microloft located in the heart of downtown Victoria advertises a rooftop garden, an in-building gym — and guidance on how to vote in the upcoming B.C. election.

The "TINY Microloft" is "certainly a challenge for a 90-day stay, thanks to our B.C. NDP gov't," the listing reads. "Please vote for B.C. Conservatives in the October 2024 election, thank you."

While it's not the average listing visitors might expect, it's one manifestation of a broader pushback by property owners against short-term rental restrictions.

Sparked by frustrations over the recently introduced restrictions, a lobby group of owners is attempting to influence B.C. Conservative and B.C. United party leaders' housing policies.

The push comes in advance of a fall election with the NDP facing a growing challenge from the B.C. Conservative Party, which has been enjoying a surge in popularity in recent opinion polls.

Analysis B.C.'s unofficial election campaign is in full swing

The Property Rights Association of B.C., a pro-short-term rental lobby group, has held online town halls this month – one with B.C. United Leader Kevin Falcon and another this week with B.C. Conservative Leader John Rustad.

The group says the meetings were forums for its members to grill both leaders on their stance on short-term rentals and, according to an email sent last week to those registered to attend the Rustad event, find out how to "get involved and make sure the NDP doesn't form government this fall."

The NDP says reversing short-term rental restrictions could further drive up home prices and scarcity.

Housing Minister Ravi Kahlon said he was not surprised to hear the opposition leaders "campaigning for investor votes" or that some short-term rental listings had appeared with overtly political messaging.

"Airbnb and some of these investors are well funded. They're a pretty powerful group. They're going to leverage that to maximize their profits," he said.

"John Rustad and Kevin Falcon have always been on the side of investors. This is not new."

Leaders grilled at town hall meeting

A recording of the Falcon event on Aug. 6 was shared with the CBC by another journalist who attended the event. The CBC. was told the Rustad town hall on Aug. 22 was for members only, and repeated requests for an interview with event organizers did not receive a response.

Rustad says that he would prioritize repealing provincial restrictions on short-term rentals if elected.

"What I believe very strongly is that local governments are the ones that need to make those decisions. They're the ones who do the business licences. They're the ones who do the zoning," he said. "And I think, quite frankly, what the provincial government did has been an overstep."

In a crackdown described by industry experts as among the most comprehensive in North America, the current regulations, which came into effect May 1, banned most short-term rentals that are not the owner's principal residence.

Over 100,000 short-term rentals could be homes: StatsCan report

Paul Kershaw, a professor at the University of British Columbia and founder of the think tank Generation Squeeze, said he feels that the B.C. Conservatives' hands-off approach would do nothing to address sky-high housing prices and record low rental vacancy rates.

"They're being seduced by the idea that we're going to get some people voting for us because they're wanting to continue to use housing as a business strategy, to commodify it as an investment strategy," said Kershaw. "That is just out of touch with the scale of the problem facing us."

B.C. United MLA Todd Stone, in an unrelated news conference in Victoria on Thursday, said that his party would bring in changes to allow people to operate one or two short-term rentals outside of their primary residence.

He says the short-term rental restrictions have yet to ease the housing shortages felt by many communities.

"People were forced to take their short-term rentals off the market, and those short-term rentals are not all turning into long-term rentals as the NDP said they magically would," he said.

Earlier this month, a report from StatsCan identified more than 100,000 short-term rentals that could be homes. In July, data from the B.C. Ministry of Housing found that nearly half of the 22,405 short-term rental listings reviewed by the province were operating illegally.

Andy Yan, director of the city program at Simon Fraser University, says that any reversal of short-term rental restrictions would come at a cost for renters.

"I think we'd probably see a further erosion of our rental housing stock [and] rents would further increase," he said.

"I think that this would further commodify residential real estate … It would lead renters into a deeper level of vulnerability."

ABOUT THE AUTHOR

Emily Fagan is a journalist based in Victoria, B.C. Her work has been featured in the Washington Post, the Globe and Mail, and Vice, among other publications. You can send her tips at [email protected].

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