There are many different types of lending arrangements. Depending on the type of loan, the respective legal rights of the borrower and lender will vary. For example, a loan may be “secured” or “unsecured”. A common example of a secured loan is a mortgage. A mortgage lender (mortgagee) will grant a loan to the borrower provided the mortgagee is granted a mortgage on the borrower’s property. The mortgage acts as security for the loan in case the borrower does not make the required loan payments. An unsecured loan is one in which there is no collateral or security for the loan. A lender gives money to a borrower and the borrower is expected to make payments as they agreed to.

The rights of the lender upon a default by the borrower will vary depending on whether the loan is secured or unsecured. With a secured loan, upon default of the borrower, the lender is able to seize and sell whatever collateral was used to secure the loan. With an unsecured loan, a lender will have to obtain a judgment against the borrower before they are able to seize and sell the assets of the borrower.

The laws in British Columbia that apply to lenders depend on a number of factors including whether the loan is for personal use (see the Business Practices and Consumer Protection Act) or whether the loan is a consumer good (see the Personal Property Security Act). Lenders and borrowers must also be mindful of the time limits that apply to legal proceedings for the recovery of money.

• Commercial and Personal Loans
• Secured Transactions
• Credit Risk Mitigation
• Realization and Security Enforcement

The lawyers at Heath Law LLP assist lenders and borrowers in relation to both secured and unsecured loan transactions. We also provide advice on secured transactions including priority issues arising under the Personal Property Security Act of British Columbia.

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