Refinancing in Surrey often pays out a former spouse, a sibling or a family lender

What does a lawyer do in a BC refinance?

A lawyer in a BC refinance registers the new lender's mortgage at the LTSA, receives the loan money into trust, pays out the old lender and any other debts the new lender requires, sends you the balance, and makes sure the old mortgage's discharge is filed. Throughout, the lawyer follows the new lender's written instructions.

For most owners that is the whole of it. The rest of this page is about refinances where the reason for borrowing changes the paperwork.

How does refinancing to buy out a spouse work in BC?

Refinancing to buy out a spouse in BC starts with a signed separation agreement or a court order setting the price and who keeps the home. Then, at one completion, the leaving spouse transfers their interest, the new mortgage registers, the old mortgage is paid out, and the leaving spouse receives their payment through the lawyers' trust accounts.

The agreement comes first because everything rests on it. A transfer between spouses or former spouses made under a written agreement or court order under the Family Law Act can qualify for a Property Transfer Tax exemption; the same transfer signed before the agreement exists, or outside its terms, may not. An agreement that meets s. 93 of the Act is also much harder for either spouse to undo later.

Taking a name off title does not end that person's promise to the old lender. It ends when the old mortgage is paid out in full, which is why the payout and the transfer are registered together. A lender can release one borrower without a payout, but only if it chooses to.

Each spouse should have their own lawyer. The lawyer for the spouse keeping the home usually also acts for the new lender; the leaving spouse's lawyer checks the transfer and the payment against the agreement. Any Land (Spouse Protection) Act entry or certificate of pending litigation on title is cancelled at the same completion. Our guide to separating when you own a home covers how its value is shared.

Can I keep an inherited house and pay out my siblings?

Usually yes, if the will allows it or the other beneficiaries agree. The executor obtains a grant, registers the house in their name as personal representative, and transfers it to you. Your new mortgage, registered at the same moment, funds your siblings' shares through a lawyer's trust account, and each sibling signs a release when paid.

Each step has a document behind it. The grant of probate, or of administration where there is no will, comes from the Supreme Court of British Columbia under the Wills, Estates and Succession Act (WESA). The executor files it at the LTSA with a transmission application. Only then can the executor sign a Form A transfer to you, and only a registered owner can give your lender a mortgage.

The estate sets the timetable, not the lender. A spouse or child of the person who died has 180 days from the grant to start a claim to vary the will, and WESA also bars distribution for a period after the grant unless the beneficiaries consent or the court allows it.

Property Transfer Tax on the transfer to you turns on your relationship to the person who died, how the home was used, and whether part of what you receive is really a purchase from your siblings. A minor beneficiary's share needs someone with authority to receive it, and the Public Guardian and Trustee may be involved.

How do I register a family loan or private mortgage?

A family loan is registered as a mortgage against the borrower's title at the LTSA, with the amount, interest, payments and repayment terms either written into it or taken from a set of standard mortgage terms on file there. If a bank mortgage is already registered, the family mortgage ranks behind it and usually needs that bank's consent.

Most first mortgages forbid further borrowing against the home without the lender's written consent, so a family mortgage registered without asking can put the bank loan in default. On any sale, the bank is paid first.

If the lending parent dies, the debt becomes an asset of their estate, and the executor is expected to collect it unless the will forgives it or counts it against the borrower's share.

If the borrower later separates, a registered mortgage is strong evidence that the money was a loan rather than a gift, and the Family Law Act treats a debt owed to a parent differently from a gift when property and debt are divided. With nothing in writing, the borrower's spouse may argue the money was a gift to them both.

Lender and borrower should each have independent advice, because they want different things from every term. The interest rate and how it is reported are questions for an accountant.

Why is my paid-off mortgage still on my title?

A paid-off mortgage stays on title because paying the loan and registering its discharge are separate steps. The lender's release has to be signed and filed at the LTSA before the register changes. Lenders are obliged to provide a discharge once paid in full, but if nobody asked for one, or nobody filed it, the old charge remains.

It usually happens when a loan was paid down over years rather than paid out at a sale or refinance, where a lawyer would have handled the discharge.

The Property Law Act lets an owner who has paid in full require a discharge. The lender signs a release, and a lawyer or notary, or sometimes the lender, files it electronically at the LTSA.

Clearing it now, while records are easy to find, beats chasing it against the completion date of your next sale or refinance.

How do you remove an old mortgage when the lender no longer exists or has died?

When the lender no longer exists or has died, someone with authority still has to sign the release. For a bank or trust company that merged or closed, that is usually its successor. For a private lender who died, it is their executor. If nobody can be found to sign, the charge can be cleared by a court application.

Tracing comes first. BC banks, credit unions and trust companies have merged and renamed many times, and the institution that took over an old lender's mortgages can usually sign once it confirms repayment. A private lender's executor has to show their authority, often with a grant, and be satisfied from the estate's records that the debt was paid.

Where no one can sign, the Property Law Act and the Land Title Act give routes to clear the charge: a Supreme Court order cancelling it, sometimes after any amount still claimed is paid into court, and for some very old charges an application to the LTSA registrar. Gather the evidence of payment first:

• Bank statements or cancelled cheques showing the final payment, and any letter saying the loan was closed.
• The registered mortgage from the title search, showing the lender, the amount and the registration date.
• For a private lender, any promissory note, receipts or messages about repayment; for an institution, account numbers and any merger notices.