Bank Meridian validly transfers its existing registered mortgage over a warehouse to Bank Summit, and the transfer is registered. The secured debt remains outstanding. No discharge or additional mortgage is created. A title-summary draft describes the property as unencumbered because Meridian is no longer the mortgagee. Which correction best explains the encumbrance position?
An encumbrance is the burden on the property, not the identity of its original beneficiary. Section 2 of the Conveyancing and Law of Property Act includes a mortgage within incumbrance and describes an incumbrancer by entitlement to its benefit. Section 63(2) of the Land Titles Act provides that the registered transferee of a mortgage becomes entitled to the mortgagee's rights, powers and remedies. The stated transaction therefore moves the benefit of the existing security to Summit; it neither discharges the security nor creates a second mortgage. No repayment demand is needed to make this stipulated subsisting mortgage an encumbrance.