Humber/Ontario Real Estate Course 3 Exam Practice

What legal right do Mr. and Mrs. Salter have once they have met all the mortgage covenants and paid off all amounts owing?

1. The discharge fee will be paid by the mortgagee

2. They cannot get the discharge without mortgagee consent

3. They are legally entitled to a discharge of mortgage

4. The mortgagee can demand an interest penalty

5. The discharge must be handled by the mortgagee

6. They must wait for the mortgagee to initiate discharge

The correct answer is: They are legally entitled to a discharge of mortgage

Mr. and Mrs. Salter have met all the mortgage covenants and paid off all amounts owing; therefore, they are legally entitled to a discharge of mortgage. This discharge is a formal release from the mortgage agreement, signifying that they have fulfilled their financial obligations. Once the mortgage has been satisfied, the lender (mortgagee) must provide a discharge to indicate that the property is no longer encumbered by the mortgage, allowing the Salters to fully own their property without any outstanding claims from the mortgage lender. The other options present scenarios that do not apply once the mortgage is paid off. For instance, payment of a discharge fee typically falls to the borrower, and consent from the mortgagee is not necessary once all financial obligations are fulfilled. Demanding an interest penalty or waiting for the mortgagee to initiate a discharge would not be relevant in this context, as those actions would imply ongoing liabilities or responsibilities that no longer exist after payment. Thus, the legal right to a discharge is firmly established under these circumstances.