[Deegee]

This is from the standard CMHC mortgage terms for Land Titles South Office; I suspect the North Land Titles Office standard CMHC mortgage terms to be simular if not identicle.

12. Payment of Taxes and Other Charges

Subject as hereinafter in this paragraph provided, the Mortgagor will pay as and when the same fall due all Taxes, rates, liens, charges, encumbrances or claims which are or may be or become charges or claims against the Mortgaged Premises or on the Mortgage or on the Mortgagee in respect of the Mortgage; provided that in respect of municipal‑taxes, rates, assessments and levies, property taxes, school taxes and local improvements charges and rates (hereinafter referred to as "Property Taxes") chargeable against the Mortgaged Premises:

(a) The Mortgagee may deduct from the final advance of money secured by the Mortgagean amount sufficient to pay the Property Taxes which have become or will become due and payable on or before the day preceding the Interest Adjustment Date and are unpaid at the date of such final advance.

(b) After the Interest Adjustment Date the Mortgagor will pay to the Mortgagee on the Instalment Dates, sums sufficient to enable the Mortgagee to pay the whole amount of Property Taxes on or before the due date for payment thereof or, if payable in instalments, on or before the due date for payment of the first instalment thereof.

(c) Where the period between the Interest Adjustment Date and the next following annual due date for Property Taxes is less than one year the Mortgagor will pay to the Mortgagee in equal instalments, during such period and during the next succeeding 12‑month period, an amount estimated by the Mortgagee to be sufficient to pay, on or before the expiration of the said 12‑month period, all Property Taxes which shall become due and payable during the said two periods and during the balance of the year in which the said 12‑month period expires; and the Mortgagor will also pay to the Mortgagee on demand the amount, if any, by which the actual Property Taxes exceed such estimated amount.

(d) Except as provided in the last preceding clause, the Mortgagor shall, on each and every Instalment Date, pay to the Mortgagee, a portion of estimated Property Taxes appropriate to secure full payment (as estimated by the Mortgagee in its sole discretion) of the Property Taxes next becoming due and payable; and the Mortgagor shall also pay to the Mortgagee on demand the amount, if any, by which the actual Property Taxes exceed such estimated amount.

(e) The Mortgagee shall allow the Mortgagor credit for interest at not less than the prevailing rate allowed by Canadian chartered banks on personal savings deposits with chequing privileges, on the minimum monthly balances standing in the mortgage account from time to time to the Mortgagor's credit for payment of Property Taxes, such interest to be credited to the mortgage account not less frequently than once each year; and the Mortgagor shall be charged interest, at the Interest Rate, on the debit balance, if any, of Property Taxes in the Mortgagor's mortgage account outstanding after payment of Property Taxes by the Mortgagee, until such debit balance is fully repaid.

The Mortgagee will apply such deduction and payments on the Property Taxes chargeable against the Mortgaged Premises so long as the Mortgagor is not in default under any covenant, proviso or agreement contained in the Mortgage, but nothing herein contained shall obligate the Mortgagee to apply such payments on account of Property Taxes more often than yearly. Provided, however, that if, before any sum or sums so paid to the Mortgagee shall have been so applied, there shall be default by the Mortgagor in respect of any payment of principal or interest or other Indebtedness as in the Mortgage provided, the Mortgagee may apply such sum or sums in or towards payment of the principal or interest or other Indebtedness in default. The Mortgagor further agrees to transmit to the Mortgagee the assessment notices, tax bills and other notices affecting the imposition of Property Taxes forthwith after the receipt of same by the Mortgagor.

Notwithstanding the foregoing provisions, the Mortgagee may request the Mortgagor to pay the Property Taxes as and when such Property Taxes become due and to submit to the Mortgagee tax receipts evidencing the payment of the Property Taxes within 30 days after they become due.

Seems like the Financial Institution can force you to do PIT from the above, but they can allow you to opt out of it if you want. Seems like they can request confirmation of taxes paid on an annual basis if they aren't paying them.

Does one our resident lawyers want to comment? Trout?