When lending money to finance the purchase of property (real estate), a bank or lending institution will secure its position by registering a mortgage over the relevant property. The mortgage is registered on the Title to the property and the bank or lending institution retains control of the Title until the mortgage is formally discharged.
Many people mistakenly believe that paying out their loan, that is, reducing the loan balance to $0, means that the mortgage over the relevant property is automatically discharged (removed) from the Title. This is not correct. In order for a mortgage to be discharged, the Title to the property and a Discharge of Mortgage form must be lodged with the Department of Environment, Land, Water & Planning (otherwise known as the Land Titles Office). Until this step is taken, the mortgage will remain registered on Title and the relevant bank or lending institution will retain control of the Title. Knowing whether your mortgage has been discharged is of particular importance in the era of electronic conveyancing which involves the replacement of paper Titles with electronic Certificates of Title.
A mortgage that is never discharged from a Title can often come as a surprise to property owners when they choose to deal with the property at a later stage and can delay subsequent property transactions whilst the mortgage is formally discharged from the Title.
If your mortgage has not been discharged, you should contact your bank or lending institution to ascertain the steps that must be taken to formally discharge the mortgage from the Title. Otherwise, if you are not in possession of the Title(s) to your property/properties or are unsure if your mortgage has been formally discharged, Whyte Just & Moore can perform a title search on your behalf in order to confirm. If you would like further information, please contact one of our experienced property lawyers at Whyte Just & Moore.