Mortgage on Leased or Unregistered Land in Newfoundland and Labrador

You have found a cabin or a home you like, but the land is leased, or nobody can point to a clean registered title. Before you fall in love with it, you need to know whether a lender will lend on it and what has to be fixed first.

No single rule answers the financing question for every property. This article explains what the law says about registering leases, deeds and mortgages, why title gaps matter, and what a lawyer will need to look at.

This article covers the law of Newfoundland and Labrador.

Will a lender finance it?

Whether a lender will advance money on leased land or land with an unclear title depends on the lender's own policies and on what the title and lease documents show. The law of the province does not decide that for you, and it is worth asking a lender or mortgage broker before you sign an offer.

If you are told yes, ask what the lender needs: the lease terms, proof of title, a survey, or other conditions. Those requirements come from the lender, so get them in writing and share them with your lawyer.

Leased land: what gets registered and what it costs

Newfoundland and Labrador has no land transfer tax. Instead, the Services Charges Act imposes a land registration charge for registering a conveyance of land, a notice of mortgage, or an assignment of a lease of land in the Registry of Deeds.

For a conveyance or an assignment of a lease, the charge is $100 where the value does not exceed $500. Above that, it is $100 plus $0.40 for each additional $100 or part of $100, paid at registration. That charge states no maximum, so it keeps rising with the value.

A notice of mortgage follows the same formula, based on the debt secured, but the mortgage charge is capped at $5,000. The Registry of Deeds offers an online fee calculator for a conveyance or notice of mortgage, and the registrar may not register an instrument until the proper fee is paid.

Land without a clear registered title

The registry is a registry of deeds and notices. It provides notice and priority, not a guarantee of title. If the paper trail has gaps, the registry will not fill them for you.

• Registration is notice to anyone who later claims an interest in the land, and an instrument is treated as registered when delivered if the registrar finds it compliant, which fixes the time of registration and priority.
• An instrument that has not been proved and registered is judged fraudulent and void against a later purchaser or mortgagee for value who registers first.
• The registrar may refuse an instrument for reasons such as a missing legible property description, illegibility or being contrary to law, and a refusal is appealed to the Supreme Court within 30 days.
• An affidavit of value must be registered for a deed of gift, and for a deed of confirmation where no prior registrations exist for that transfer. The registrar may also require one when advisable.

Whether a particular property needs one of these steps depends on its history, which is why a lawyer's review matters.

Searching the title and reading what you find

The Registry of Deeds is open to the public, and registered documents may show property descriptions, liens and consideration paid. Registry staff do not do searches for clients, and title searching in the province is complicated, so a professional search firm or lawyer is recommended.

A search may show only a notice of mortgage rather than its full terms. A mortgagor can ask the mortgagee for a full copy, which must be provided within 30 days, and a mortgagee must register a release within 60 days after the mortgage is fully paid.

On a conveyance for valuable consideration other than a mortgage, the seller is treated as promising that they have full power to convey as beneficial owner and that the property is free of encumbrances except those expressly accepted.

What to do next

The Registry of Deeds says it is advisable to engage a lawyer to prepare the documents to ensure compliance and facilitate registration. Preparing a deed or mortgage for registration is also part of the practice of law.

• Ask the seller for the lease, any deed and any survey they have.
• Speak to a lender before making an unconditional offer, and ask for its conditions in writing.
• Have a lawyer review the title history and the lease terms.
• Make your offer conditional on satisfactory title and financing.
• Budget for the registration charges and search costs.
• Ask your lawyer what must be registered, and in what order, so your interest keeps its priority.

Frequently asked questions