# 2016-211 - Home Equity Assistance Program (HEAP)

Home Equity Assistance Program (HEAP)

Case Summary

F&R Date: 2017–02–16

The Committee had to determine if the grievor could receive the Home Equity Assistance (HEA) benefit for the loss realized on the sale of her home.

The Initial Authority (IA) noted that Section 8.01 of the Canadian Forces Integrated Relocation Program (CF IRP), Sale and Purchase of Principal Residence, states that its purpose is to assist a Canadian Armed Forces (CAF) member in the sale of a principal residence when posted from one location to another. He indicated that section 1.4, Definitions, provides that a principal residence must be owned by a CAF member, or their dependants, or jointly. The IA adds that CF IRP Article 8.2.13, HEA, provides that CAF members may be eligible for HEA benefits if the CAF member or their dependants own the principal residence. He stated that, when the grievor signed a Consumer Proposal, she was required to turn over possession of her home to the bank. The IA concluded that, when the house sold, the grievor was no longer the owner of the property.

To determine if the Consumer Proposal changed the ownership of the house the Committee requested a copy of the municipal property tax certificate and a copy of the provincial land title. Both documents clearly showed that the grievor was in fact the registered owner of the house when it was sold. The Committee found that while the grievor had a Consumer Proposal in place to manage her financial circumstances, she remained the legal owner of her house until it was sold. The Committee recommended that the grievor be granted HEA.

FA Decision Summary

The CDS, who acted as the FA in this case, disagreed with the Committee's recommendation to uphold the grievance and reimburse the grievor.” The FA found that the “Committee's understanding of consumer proposals and their impact on secured debts such as a mortgage was flawed.” Citing from the Office of the Superintendent of Bankruptcy Canada website, the FA stated that secured creditors, such as a bank holding a mortgage, are not impacted by a consumer proposal and can seize a property if one fails to make their mortgage payments. The bank decided to foreclose and take control of the property. Through the court approved foreclosure process, it placed the house for sale and sold it, and was under no obligation to proceed with a property title change. The FA also noted that it was the Canada Mortgage and Housing Corporation (CMHC), as the insurer, who reimbursed the bank for the lost incurred upon sale. While CMHC could have sued for its losses, as an unsecured creditor, it decided to participate in the consumer proposal and collect only the monies the grievor had paid over three years. The FA found that, upon foreclosure, the grievor lost all rights to the property and, since she was not the seller of record, there was no entitlement to HEA under the CF IRP Directive.

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