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23 Extinguishment Of Liability Under The Personal Covenant

In This Volume

  • 23 (1) Despite section 21(1), a person who
  • (a) transfers an estate in fee simple in land subject to a residential mortgage, or
  • (b) transfers a purchaser’s interest under a residential agreement for sale,
  • ceases to be liable under the personal covenant in the mortgage or agreement for sale, unless the mortgagee or vendor under the agreement for sale gives, within 3 months after the existing term has expired, written notice to the person, making a demand for payment of the sum secured.
  • (2) Subsection (1) applies despite any provision of the mortgage or agreement for sale that provides that all amounts outstanding at the end of the term are payable without a demand.
  • (3) Despite section 21(1), a person who
  • (a) transfers an estate in fee simple in land subject to a residential mortgage that is, under the terms of the mortgage, payable on demand, or
  • (b) transfers a purchaser’s interest under a residential agreement for sale that is, under the terms of that agreement, payable on demand,
  • ceases to be liable under the personal covenant in the mortgage or agreement for sale, unless the mortgagee or vendor under the agreement for sale gives, within 3 months after that mortgagee or vendor has received written notice from the person of the transfer, written notice to the person, making a demand for payment of the sum secured.
  • (4) A waiver of the benefit contained in subsections (1) and (3) is of no effect unless it is entered into by the original parties to the mortgage or agreement for sale after the transfer or assignment referred to in subsections (1) and (3).

1979-340-20.2; 1988-42-7, proclaimed effective December 1, 1988 (B.C. Reg. 411/88).