Real estate law · Private mortgages
Private mortgages do work that institutional lenders cannot or will not — bridging timing gaps, financing files that fall outside conventional underwriting, getting capital to a borrower in days rather than weeks. We act on both sides of these transactions and provide Independent Legal Advice where required.
What we do
Borrower-side. We act for property owners taking out a private mortgage to refinance, access equity, or bridge a financing gap. The work is reviewing the lender's commitment letter, negotiating loan documents, registering the mortgage, closing the advance, and (often) coordinating with an A-lender on the eventual refinance out.
Lender-side. We act for private lenders making real-estate-secured loans to BC borrowers. The work is loan documentation, security registration (mortgage, sometimes assignment of rents, sometimes personal guarantees), priority confirmation, advance, and ongoing administration.
Independent Legal Advice. When a private lender requires the borrower or a guarantor to obtain ILA, we provide it as a separate engagement on a fixed-fee per-file basis.
Multi-lender transactions
On a typical residential file with one institutional mortgage, priority is straightforward: that mortgage is in first position. Where private lending stacks on top — a second or third mortgage from a private lender — priority is determined by the order of registration at the Land Title Office, subject to any priority agreements between lenders.
Priority matters at two moments. On a refinance or sale, mortgages are paid out in priority order from the proceeds; lower-priority mortgages take what is left. On a default or foreclosure, priority determines who recovers first and how much. A second or third mortgage at high combined loan-to-value often takes a partial loss in a forced sale.
We work on multi-lender files regularly — registering new mortgages behind existing ones, coordinating priority confirmations, and setting up trust conditions so each lender's funds end up where they should.
Frequently asked
A private mortgage is a loan secured against real estate where the lender is not a regulated financial institution — typically an individual lender, a mortgage investment corporation (MIC), or a private lending fund. The loan is secured the same way a bank mortgage is — registered against title at the Land Title Office — but the underwriting, terms, and process are different. Rates are higher, terms are shorter, and the lender's focus is usually on the equity in the property rather than the borrower's income or credit.
Three common scenarios: (1) the borrower's income or credit does not fit institutional underwriting but the property has solid equity; (2) timing is too tight for an A-lender — closing in days, not weeks; (3) the borrower needs short-term capital for a specific purpose and intends to refinance back to an institutional lender once the situation is resolved. Most private mortgages are bridge financing — a 6-month to 2-year solution rather than a long-term mortgage.
ILA is a meeting between the borrower (or guarantor) and an independent lawyer — one who is not acting for either side on the transaction. The lawyer reviews the loan documents with the borrower, explains the terms in plain language, and signs an ILA certificate confirming that the borrower understood what they were signing. Many private lenders require ILA to protect against later claims that the borrower did not understand the loan. We provide ILA on a fixed-fee per-file basis.
Yes. Many private lending arrangements involve multiple mortgages — first, second, sometimes third position — registered in priority order at the Land Title Office. Priority matters: the first mortgage is paid out first on a sale or default, and lower-priority mortgages take whatever equity is left. Lenders price accordingly: a second mortgage at 70% combined LTV will price differently than a first mortgage at the same LTV.
On a typical private mortgage, the lender expects the borrower to refinance back to an institutional lender or sell the property at the end of the term. If neither happens, the lender's options include extending the term (sometimes at a higher rate), starting foreclosure proceedings, or working out a payment plan. Foreclosure in BC is a court-supervised process; we act for both lenders pursuing recovery and borrowers defending or working through alternatives.
Generally no — that is a conflict of interest under the Law Society of BC rules. The exception is narrow circumstances where both parties consent in writing, the conflict can be managed, and (often) the deal is sufficiently simple. In most files, one party retains us and the other retains separate counsel.
Tell us where you sit on the file and the timeline. We'll come back with a fee, a closing plan, and (where required) an ILA quote.