When mortgage-related transactions become statute
barred under new limitation rules
By SAmANthA GAle
limits of
liability Come
into focus
t
here has been a new Limitation
Act in British Columbia for
almost two years now, and the
courts are starting to render
some decisions which clarify the
new limitation rules as they apply to lending.
e new Act created some significant changes
to the window of time following a loss within
which a plaintiff can bring a cause of action
against a defendant in British Columbia. It
has implications for real estate developers,
mortgage lenders and real estate professionals,
including mortgage brokers. One significant
goal of the new Act is to make the real estate
construction industry and other businesses
more competitive as shorter and more precise
limitation periods will result in an ability
to predict litigation exposure with greater
accuracy. In addition, narrower limitation
periods will, in all likelihood, significantly
reduce litigation costs and liabilities. Simpler
and better understood limitation periods
are intended to seek a balance between
the plaintiff 's need to access justice and
the defendant's need to close off potential,
unknown liabilities. However, potential
plaintiffs will need to be more decisive about
their litigation decisions and take faster
action when opting to proceed with a claim.
Here is an explanation of why.
In a nutshell, limitation periods put a cap
on the length of time since the occurrence of
an event that people have to pursue a legal
claim in the court system. e most significant
change is that under the previous Limitation
Act, there were a variety of limitation periods
ranging from two to 10 years. Now, for most
civil claims (subject to limitation periods
contained in specific statutes and some specific
exemptions in the new Act), there is just one
two-year limitation period requiring that
civil claims be brought within two years of
caseanalysis
