- For land in the Land Titles system, a registered mortgage can be discharged by registering a discharge of mortgage in the prescribed form, and requirements differ between Land Titles and the Registry of Deeds.
- Releasing a person from the mortgage covenants is a separate step from discharging the mortgage itself.
- Electronic registration is done by lawyer subscribers, so you will normally rely on a lawyer to register the discharge.
If you sell a home that still has a mortgage, the buyer expects to receive the property free of your lender's claim. That does not happen by itself. The mortgage has to be paid out, and the lender's interest has to be removed from the land records.
This article explains in plain terms how that discharge works in New Brunswick, which documents are involved, and what can complicate it. It is general information, not advice on your own file.
This article covers the law of New Brunswick.
What a discharge of mortgage actually is
When you borrowed against your home, the lender's mortgage was registered against the property. Registered land is mortgaged by registering a mortgage in the prescribed form, and a mortgage in that form is deemed to contain the prescribed covenants and conditions.
To remove it, the Land Titles Act lets a registered mortgage be discharged, in whole or in part or as to any of the land, by registering a discharge of mortgage in the prescribed form. Paying the lender is one thing; having the discharge registered is what clears the public record.
How the process usually unfolds
The exact steps depend on your lender and your lawyer, but a sale with a mortgage generally follows this pattern.
- You sign an agreement of purchase and sale and tell your lawyer who your lender is.
- Your lawyer and your lender sort out the amount needed to pay out the mortgage on your closing date. Any interest or prepayment charges depend on your mortgage contract, so it is worth confirming the details with a lawyer.
- Before closing, the mortgage has to be dealt with so the buyer receives the property free of it. How the payout is arranged depends on your lender and your lawyer, so it is worth confirming with a lawyer.
- A discharge of mortgage in the prescribed form is registered so the mortgage is removed from the property.
- Ask your lawyer for a clear written summary of what you can expect to receive once the lender is paid and the closing costs are accounted for.
Ask your lender early about any penalty for paying out before the end of your term. That cost can change what you net from the sale, and it is set by your mortgage contract rather than a general rule.
Who does what
Electronic instruments can be submitted only by subscribers, meaning Law Society of New Brunswick members authorized to practise law who have an agreement with Service New Brunswick, apart from stated exceptions. That is why lawyers handle the electronic registration of deeds and mortgages.
Paper submission is allowed in limited cases, such as when a registered owner submits the instrument personally. Either way, instruments must be properly executed and accompanied by all pertinent documents and approvals.
| Person | Usual role |
|---|---|
| You, the seller | Give your lawyer your mortgage details and sign what is needed |
| Your lender | Holds the mortgage being paid out; how it handles payout depends on your mortgage terms |
| Your lawyer | Explains the payout steps for your file and, as a subscriber, can submit instruments electronically |
| Service New Brunswick | Receives the registered instruments |
Situations that can complicate a discharge
- Partial discharge: a mortgage can be discharged in part or as to any of the land, which matters if only some of the property is being sold.
- Release of a covenantor: a mortgagee may release a covenantor from some or all covenants by registering a release in the prescribed form, which is a separate step from discharging the mortgage. If someone co-signed your mortgage, ask whether that person needs a release.
- Land Titles or Registry of Deeds: requirements differ between the two systems.
- Property description: describing land by its approved PID is a sufficient description for every transaction, and the registrar may reject an instrument that does not describe the land by its approved PID.
If the land records show something you do not recognize, a certificate of registered ownership can be required from the registrar for the prescribed fee, and it is evidence in all courts of its particulars as of its date and time.
What to do next
- Find your mortgage statement and note the lender, account number and any other borrowers or co-signers.
- Check your mortgage terms for prepayment charges or notice requirements.
- Contact a New Brunswick lawyer as soon as you have a signed agreement, or even before listing.
- Ask whether any co-signer will need a release in addition to the discharge.
- Confirm what you expect to receive after the lender is paid.
Frequently asked questions
Do I register the discharge myself?
Electronic instruments can be submitted only by subscribers, who are Law Society members with an agreement with Service New Brunswick. Paper submission is allowed in limited cases, such as when a registered owner submits the instrument personally. Requirements differ between Land Titles and the Registry of Deeds, so it is worth confirming with a lawyer how this applies to your property.
Is releasing a co-signer the same as discharging the mortgage?
No. A mortgagee may release a covenantor from some or all covenants by registering a release, and that is a separate step from discharging the mortgage.
Can only part of the land be discharged?
Yes. A registered mortgage can be discharged in whole or in part or as to any of the land.
What if my mortgage has a prepayment charge?
That depends on your mortgage contract and your lender. Ask for a written payout figure for your closing date so you know the amount before closing.
Sources
- Land Titles Act, s. 26(1) — laws.gnb.ca
- Service New Brunswick - Land Registration FAQ — gnb.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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