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An assignment of rents is a security document, usually registered alongside a mortgage or charge, that gives the lender the right to collect rent directly from a property's tenants if the borrower defaults.
On a rental, multi-unit, or commercial file, the mortgage itself secures the lender's interest in the real property, but it doesn't automatically give the lender access to the rental income that property generates. An assignment of rents closes that gap: it can be a general assignment covering all current and future leases, or a specific assignment tied to one or more named tenants.
In normal circumstances the borrower keeps collecting rent as usual — the assignment only becomes active on default, at which point the lender can notify tenants to redirect rent payments, or seek a court-appointed receiver of rents. Brokers arranging investment property or multi-unit financing, including deals underwritten through MLI Select, should expect this document as a standard part of the lender's security package.
Registered as part of the security package: an assignment of rents is typically signed and registered alongside the standard charge, not as a stand-alone land registration.
Only triggers on default: the assignment sits dormant while the borrower is current on the mortgage, and only becomes active if the lender enforces its rights after a default.
Common on income-producing files: lenders financing rental, multi-unit, or commercial properties — where the rental income itself supports the underwriting — routinely require this document.
General vs. specific assignment: a general assignment covers the whole property's current and future leases, while a specific assignment names one or more particular tenants or leases as collateral.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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