Regulatory Statement

Purpose

This Regulatory Statement (Statement) establishes content requirements for mortgage administration service agreements provided under the Mortgage Services Act (MSA), MSA Regulation (Regulation), and MSA Rules (Rules).

This Regulatory Statement comes into effect on October 13, 2026, and repeals all regulatory statements related to this topic under the previous Mortgage Brokers Act.

Background information

Section 80 of the Rules requires that, subject to limited exceptions, a licensee must not administer, or arrange for another person to administer, a mortgage on behalf of one or more persons with an interest in the mortgage unless a written service agreement is in place. Section 80 defines a service agreement as an agreement between a mortgage brokerage and a client under which a licensee provides mortgage services to or on behalf of the client. Per section 80(2) of the Rules, the Superintendent can establish the form and content of written service agreements as well as requiring specific documentation to accompany the agreements. These requirements are set out in this regulatory statement.

Per section 80(1) and (2) of the Rules, where a written service agreement is required, it must:

• Contain the full agreement of the parties respecting:
• The remuneration of the licensee and any other person for all services relating to the administration of the mortgage; and
• All other expenses and costs related to the mortgage;
• Specify the extent of the responsibilities of each party for decisions respecting:
• The collection of money under the mortgage;
• The prepayment of principal under the mortgage;
• Discharges and partial discharges of the mortgage; and
• The commencement or continuation of enforcement proceedings in the event of default; and
• Be dated and signed by the licensee and the other parties.

Pursuant to section 80(3) of the Rules, a written service agreement is not required where a licensee administers, or arranges for a person to administer, a mortgage on behalf of:

• A permitted person¹; or
• The licensee’s related mortgage brokerage (meaning the mortgage brokerage with which the licensee is licensed).

More information on Mortgage Administration Service Agreements, including other related requirements for mortgage administration, can be found on BCFSA’s Mortgage Services Knowledge Base. 

^{1 Under the Rules, a permitted person means any of the following:}

^{(a) the government of Canada or the government of a province or an agency of any of those governments;}

^{(b) a municipality, regional district, public board or commission in Canada;}

^{(c) a savings institution;}

^{(d) cooperative credit society as defined in the Cooperative Credit Associations Act (Canada) or a financial services cooperative as defined in the Act Respecting Financial Services Cooperatives (Quebec);}

^{(e) the Business Development Bank of Canada;}

^{(f) a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada) or a provincial pension supervisory authority;}

^{(g) an insurance company;}

^{(h) a trust company or insurer authorized under the laws of Canada or of a province other than British Columbia to carry on business in Canada or that province;}

^{(i) a person registered under the Securities Act or the securities legislation of another province as a dealer or its equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by the person;}

^{(j) person registered under the Securities Act or the securities legislation of another province as a portfolio manager or its equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by the person;}

^{(k) an investment fund, if the investment portfolio of the fund is managed by a person who is registered under the Securities Act or the securities legislation of another province as a portfolio manager or its equivalent;}

^{(l) a person or trust that acquires mortgages or interests in mortgages for the purpose of offering, as a security as defined in the Securities Act, interests in a pool of those mortgages or interests in mortgages;}

^{(m) a subsidiary, as defined in the Business Corporations Act, of a person or entity referred to in any of paragraphs (c) to (l);}

^{(n) a person or entity in a foreign jurisdiction that is similar to an entity referred to in any of paragraphs (c) to (m); or}

^{(o) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government.}

Requirements

Content of mortgage administration service agreements

A mortgage administration service agreement must be sufficiently clear and complete to give effect to the full agreement of the parties and the allocation of responsibilities required under the Rules.

To meet these requirements, a written service agreement must include:

• A clear statement of the purpose of the agreement, reflecting the full understanding of the parties regarding the administration of the identified mortgage or mortgages;
• Records to be maintained related to each mortgage transaction to which the agreement applies, including, but not limited to, the registration number, the secured property, and the borrower;

• A description of the services to be provided by the licensee, which may include:
  • Collection of mortgage payments,
  • Management of mortgage-related trust accounts,
  • Disbursement of funds,
  • Monitoring and reporting on mortgage performance,
  • Taking steps to enforce payment or responding to default, and
  • Communication with borrowers, as required;

• Identification of which party is responsible for providing borrowers with information, statements, or notices, where applicable;
• A clear description of how remuneration is calculated and the method of payment;
• A description of all other expenses or costs related to the mortgage, and which party is responsible for those costs;
• A statement that trust funds received in connection with the mortgage will be handled in accordance with the MSA and applicable trust account requirements;
• Disclosure of any actual or potential conflicts of interest, or a statement that none exist, in accordance with the MSA; and
• The manner in which notices under the agreement will be provided.

A mortgage administration service agreement does not replace or satisfy disclosure obligations under the MSA. Required disclosures must be provided separately in accordance with the MSA, Regulation, and Rules. More information on disclosure requirements can be found on BCFSA’s Mortgage Services Knowledge Base.

Form of agreement

To support compliance, BCFSA has developed an optional Mortgage Administration Service Agreement template. While use of this template is not mandatory, licensees are encouraged to use it, as it is designed to address the requirements in a clear and consistent manner.

Licensees who choose to use an alternative agreement remain responsible for ensuring that the agreement complies with all applicable requirements.

Legislation

Rules s. 80

Copies of the legislation are available from www.bclaws.gov.bc.ca

Additional information

For inquires, please email msa@bcfsa.ca.