Private lending disclosure rules, province by province.

A private mortgage usually involves a broker who may have a financial relationship with the lender — a referral arrangement, a shared ownership stake in a mortgage investment corporation, or simply a closer, more repeat-business relationship than exists with an A lender's underwriting desk. That relationship is exactly what conflict-of-interest disclosure exists to surface, and it's a relationship that simply doesn't exist in the same way on a conventional bank file, where the lender's pricing and process are standardized and largely outside the broker's influence.

FSRA's supervision has flagged this directly: examinations of large brokerages funding private mortgages have found recurring gaps in suitability assessment, in cost-of-credit accuracy, and in disclosure of the lender's identity and relationship to the brokerage. None of the four provincial frameworks below treat disclosure as optional paperwork — it's the mechanism that lets a borrower or lender actually see what they're agreeing to, and it's one of the first things a regulator asks to see if a complaint or a routine audit ever touches the file.

It's also worth separating two things that often get blurred: suitability, whether the private product fits the client's circumstances at all, and disclosure, whether the client actually understood what they were agreeing to once the product was chosen. A file can pass one and fail the other — a genuinely suitable private mortgage placed with sloppy or late disclosure is still a compliance problem, even though the underlying recommendation was sound.

Ontario brokerages use the prescribed Form 1 Investor/Lender Disclosure Statement for Brokered Transactions. Under O. Reg. 188/08, that disclosure has to reach the lender or investor at the earliest opportunity and no later than two business days before the funds are advanced or the transaction otherwise proceeds — shortened to one business day only if the lender consents in writing.

Separately, section 26 requires the brokerage to disclose the nature of its relationship with each lender it presents to a borrower, and section 27 requires disclosure of any actual or potential conflict of interest. Arranging private mortgages in Ontario also requires the agent to hold a mortgage agent level 2 licence, which itself requires an FSRA-approved Private Mortgages course — disclosure competency is built into the licensing bar, not left to individual judgment.

In practice, this means the Form 1 shouldn't be the last document generated before funding — it should be one of the first, alongside the appraisal order and the payout statement request, so there's no last-minute scramble to hit the two-business-day window.

The mechanics differ, but the underlying question a broker should be able to answer in every province is the same: does this borrower or lender understand who they're dealing with, what the broker's stake in the deal is, and what it's going to cost? Alberta's framework adds a layer worth noting on its own — RECA also requires disclosure of any financial interest the broker or brokerage holds in the lending entity itself, such as shares in a mortgage investment corporation, on top of the borrower consent piece. For a deeper look, see the Real Estate Council of Alberta's guidance on the role of an agent for a private lender.

The files that pass a compliance review cleanly are the ones where disclosure is generated at intake, alongside the appraisal order and the payout statement request, not assembled the night before funding. A standing checklist tied to the specific province's form removes the guesswork — see the Private Lending Disclosure Checklist for a working version.

Brokerages that route private files through Treadstone's fulfillment associates get that discipline built in as a standard step, not a last-minute scramble before close.

The failures FSRA has documented aren't usually deliberate concealment — they're a disclosure form generated late, a conflict of interest that seemed too small to mention, or a cost-of-credit figure copied from a template instead of calculated for the specific file. Each one looks minor in isolation and becomes a genuine compliance finding in aggregate, especially across a brokerage handling a meaningful volume of private files each year.

The fix isn't more paperwork for its own sake — it's making the province-specific disclosure a fixed step in the file timeline, with a named owner and a due date, the same way condition clearing or title search is tracked on any other file.

A useful test for a brokerage reviewing its own process: pull five closed private files at random and confirm the disclosure form is dated before the funds-advanced deadline in every one, not just the majority. A single late disclosure buried in an otherwise clean file is exactly the kind of finding a supervision examination surfaces, and exactly the kind of gap a routine internal spot-check catches first.

The same spot-check is worth running whenever a brokerage takes on a new source of private mortgage referrals — a new lender relationship or a new referral partner is exactly the moment a disclosure step can quietly get missed, simply because the intake process hasn't caught up to the new workflow yet.

Beyond the disclosure form itself, an audit-ready file keeps a dated record of when it was delivered and how — email timestamp, signed acknowledgment, or courier confirmation — alongside the cost-of-credit breakdown and the suitability note discussed earlier in this series. Regulators reviewing a private file aren't just checking that a form exists somewhere; they're checking that it reached the right person on time and that the borrower or lender had a genuine opportunity to read it.

Brokerages that standardize this record-keeping across every private file, rather than treating each one as a one-off, are the ones that move through a supervision review quickly instead of spending weeks reconstructing what happened on files closed months earlier.