Mortgages—let's get your priorities straight

The priority of interests in Torrens title land is generally determined by the order of registration. So, a mortgage over real property registered first in time will usually have priority over an unregistered mortgage or a mortgage registered later in time.

Here, banking and finance lawyers Grant Schulz and Kate Dart explain the importance of priority and how the equitable doctrine of marshalling may assist lenders with a lower ranking mortgage.

WHAT YOU NEED TO KNOW

1. It is important for lenders to understand their mortgage priority and how this may affect the recovery of monies owed if a borrower defaults under a loan agreement.
2. Generally, a lender with a first registered mortgage will be able to enforce its security interest ahead of any person holding a lower priority mortgage registered on title to the same property.