TMSSD Inc. v. Ojeikere, 2025 ONSC 5245, is an important new decision on mortgage default interest, section 8 of the federal Interest Act, and which charges lenders can actually enforce on arrears secured by real property in Ontario. In this video, Nick Tenev, a lawyer at Cowan Litigation and the voice behind Ontario Real Estate Law Insights, walks through the decision and what it means in practice for private lenders, borrowers, and real estate lawyers.
Nick explains the structure of the loan and mortgage, the default interest and additional charges the lender tried to recover, and how the court analyzed those provisions under section 8. He discusses the distinction between legitimate compensation for risk and unenforceable penalties, how courts look at interest-escalation clauses and “extra” fees on arrears, and why careful drafting matters if a lender wants its default remedies to survive judicial scrutiny.
For transactional and litigation counsel, Nick highlights practical lessons for structuring mortgage and promissory note terms, documenting fees and charges, and advising clients about the real enforcement risk around aggressive default interest. If you act for lenders, borrowers, or investors in Ontario real estate deals, this case is a helpful reminder that section 8 can limit recovery even when the loan documents look lender-friendly on paper.
