A buyer, Mark, is interested in purchasing an acreage near Airdrie. His real estate associate performs a title search and discovers a mortgage registered against the property for $850,000. Mark is only offering $750,000. What is a key implication of this discovery for the transaction?

Question: A buyer, Mark, is interested in purchasing an acreage near Airdrie. His real estate associate performs a title search and discovers a mortgage registered against the property for $850,000. Mark is only offering $750,000. What is a key implication of this discovery for the transaction?

Answer options:

• The seller will be unable to discharge the mortgage, making the sale impossible.
• The Land Titles Office will automatically adjust the mortgage amount to the purchase price. ✅ The seller is obligated to discharge the existing mortgage upon sale, typically using the proceeds from the sale, otherwise, the buyer will not receive clear title.
• The buyer will be responsible for the difference between the mortgage amount and the purchase price.

Correct answer: The seller is obligated to discharge the existing mortgage upon sale, typically using the proceeds from the sale, otherwise, the buyer will not receive clear title.

Explanation: Upon the sale of mortgaged property, the seller is generally responsible for discharging any existing mortgages to provide the buyer with clear title, as per the Real Estate Act and standard real estate practice. The mortgage discharge is facilitated at the Land Titles Office.