Recently, I was retained for a subsidiary matter involving the provision of a payout statement to a client’s borrower to authorize the discharge of a mortgage on title to a property in Windsor, Ontario. Prior to my retention, the client forwarded me an email thread in which the borrower’s lawyer was seen pressuring them to “immediately” provide this payout statement. Specifically, this lawyer stated,
“…You are required under the Mortgages Act [sic] to provide the payout statement immediately. You can charge whatever penalty you need, but a two-month delay on your end may result in legal consequences to you as this delay would be highly prejudicial to my client. Please provide a statement as soon as possible.”
Upon reading this, I immediately undertook to review the Mortgages Act, R.S.O. 1990, c. M.40 (the “Act”) for myself. In the past, this would have required possibly an hour of research, including scrolling through annotations and tables of contents, multiple Ctrl-F queries for key terms, while consulting legal databases or reading the Act directly. Now, with the advent of AI, I simply copied and pasted the entire Act into three AI tools: Claude, Gemini, and ChatGPT. For matters like these, I rarely rely on a single source, as I use Claude for language and reading summarization, while the other two for general research and coding. I immediately gained clear insight into the Act: the closest timeframe to “immediately” was 15 days, and only in circumstances of default, an issue unrelated to providing payout statements on demand. I found it difficult to believe a lawyer would make such an unsupported claim without considering that their assertion could be scrutinized.
To provide more detail, the provision in the Act that comes close to what they referenced is Section 22(3), which requires mortgagees to respond to requests for statements of arrears within fifteen days. However, to be clear, this section specifically deals with statements of arrears/defaults requested by mortgagors seeking relief from default, not payout statements for mortgage discharge purposes. Moreover, a 15-day timeframe cannot reasonably be interpreted as “immediate.” In summary, the key findings revealed within minutes that, there is no provision requiring “immediate” provision of payout statements; the 15-day period applies only to default statements under Section 22, not to payout statements. This provision operates in the context of relief from default, not mortgage discharge. The Act contains no general requirement for immediate action. That lawyer either misunderstood the Act, conflated different sections by misunderstanding, or made an assertion to yet-unrepresented individuals hoping it would not be scrutinized.
The lesson here is simple: always verify legal claims, no matter who makes them. Lawyers, whether through ignorance, overconfidence, or strategic posturing, sometimes make assertions that sound authoritative but lack foundation.