The advance is the early repayment of a loan by a borrower, in whole or in part, often as a result of an optional refinancing to benefit from lower interest rates.  Mortgage lenders are required to disclose the payment tax at the time of the conclusion of a new mortgage. Such sanctions cannot be imposed without the consent or knowledge of a borrower. However, borrowers should be informed of any payments made well before the closing of the close. If the lender has not said anything about it, borrowers should apply in advance. Some lenders impose a penalty if a refinancing or sale of the home within the first two to three years of the original mortgage is complete. Others collect a tax if the balance is paid within the first five years. A problem may arise when the borrower has been late under the terms of the loan agreement and the lender chooses to require payment of the loan before the specified maturity date. In this case, does the lender have the right to recover, within the amount requested, the amounts that should have been paid under a down payment clause if the borrower made the payment in response to the debt? This issue arose in the recent decision of Cymax Stores Inc.
v. Coleco Investments Inc., 2019 BCSC 492. – Interest that should have been due “even if Mr. Holyoake had scrupulously complied with the repayment schedule.” In this scenario, the sanctions rule could not be applied, as this provision is not contrary to the violation.- Interests that would not have been charged if Mr. Holyoake had complied with the payment plan. The judge found that “failure to comply with the repayment plan” was the trigger for interest, and it was “undoubtedly a violation of the agreement.” The clause therefore stipulated the sanctions rule. In the second scenario, the question arose as to whether the clause protected a legitimate commercial interest and whether the protection was “extravagant or exorbitant or unacceptable”. The judge again chose to oppose Mr.
Holyoake on this point because the clauses providing that the total balance of the debt must be paid in the event of a late payment are standard rules and that the collection of additional interest in addition to this amount is also a common practice. As the judge noted, there is a strong economic basis: “Once the debtor is late in payment, the creditor is not only kept out of his money, but is at increased credit risk.” COMMENT This case shows that carefully formulated obligations can make a difference in the court`s application of the rule against criminal clauses. It seems that obligations that do not apply in the event of a breach of contract, but in the event of non-compliance with a condition, should not be covered by the rule against the penalty clauses. This is also reflected in the decision of the Edgeworth Capital Court of Appeal2. In this case, the Tribunal found that a “cross-by-default” provision is not contrary to the sanctions rule, since the fee payable has nothing to do with damages for infringement; it was payable for the event of a particular event. This case, as well as the Edgeworth Capital case, may also show a reluctance on the part of the court to use the sanctions rule to thwart standard credit rules. Footnote:1 The Angelic Star  1 Ll Rep 122.2 Edgeworth Capital (Luxembourg) SARL – anr v Ramblas Investments BV  EWCA Civ 412.