Bank of Montreal v. Jain (ONSC 12 March 2026)
A recent Ontario decision, Bank of Montreal v. Jain, clarifies an important point about mortgage enforcement and the sale of property.
The Situation
The Bank of Montreal had taken enforcement steps against the property of the defendants, Navnit Jain and Juvy Cirujales Jain. As part of the process, the lender began selling the property after obtaining judgment and a writ of possession.
The defendants became concerned about how long the sale process was taking. They brought a motion asking the Court to order the Bank to disclose more information about the sale, particularly the appraisal obtained by the lender.
By the time the motion was argued, the defendants narrowed their request to essentially one thing: “the appraisal would suffice.”
The Legal Issue
The question for the Court was simple:
- Does a mortgage lender have a legal obligation to disclose its appraisal to the borrower while selling the property?
The Court’s Decision
Justice Conlan of the Ontario Superior Court of Justice dismissed the motion.
The Court confirmed that a mortgagee selling property:
- must act in good faith and
- take reasonable steps to obtain fair market value.
Lenders typically obtain independent appraisals to help meet that obligation.
However, the court held there is no legal authority requiring a lender to disclose its appraisal to the borrower.
While sharing the appraisal might be good practice, imposing such a requirement would effectively create new law, something the court declined to do on a brief motion.
The Judge also noted broader concerns, including:
- whether lenders would then have to disclose opinions of value, marketing documents, or communications with realtors
- how such disclosure might affect realtor-client confidentiality
- the long-established principle that mortgagees do not owe fiduciary duties to mortgagors
Practical Reality
Borrowers who are worried about a sale price still have protection.
If a property is sold for less than fair market value, the borrower can later challenge the sale as improvident.
One practical step often taken by mortgagors is to obtain their own appraisal to compare against the eventual sale price.
Costs
The court awarded the bank $5,751.40 in costs, payable by the defendants within 120 days, giving them extra time because of their financial difficulties.
Considerations for Real Estate Professionals
When a lender sells a property after enforcement:
- The lender must try to obtain fair market value
- The lender does not have to disclose its appraisal to the borrower
- Concerns about the sale price are usually addressed after the sale, not during the marketing process
Understanding this distinction helps explain why lenders and their agents may limit the information they share during a power-of-sale transaction.
Naturally, once the sale has taken place, the particulars require disclosure to the mortgagor.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com