A buyer's solicitor discovers an unredeemed mortgage on the title of a property during the final title search, despite the seller's declaration that the property is free and clear of all encumbrances. The seller insists the mortgage was discharged years ago. In Ontario, what is the most appropriate and legally sound course of action for the buyer's solicitor to advise their client?

Question: A buyer's solicitor discovers an unredeemed mortgage on the title of a property during the final title search, despite the seller's declaration that the property is free and clear of all encumbrances. The seller insists the mortgage was discharged years ago. In Ontario, what is the most appropriate and legally sound course of action for the buyer's solicitor to advise their client?

Answer options:

• Advise the buyer to proceed with caution and request an indemnity from the seller for potential future claims related to the mortgage. ✅ Insist that the seller provide a registrable discharge of mortgage before releasing the balance of the purchase funds.
• Suggest the buyer purchase title insurance to cover the risk associated with the unredeemed mortgage.
• File a caution against the title to prevent the seller from further dealing with the property until the issue is resolved.

Correct answer: Insist that the seller provide a registrable discharge of mortgage before releasing the balance of the purchase funds.

Explanation: Under the Land Registration system in Ontario, a vendor must provide clear title. An unredeemed mortgage creates an encumbrance, and the buyer's solicitor must insist on a registrable discharge to ensure the buyer receives marketable title, as per the vendor's obligations in a standard Agreement of Purchase and Sale.