Foreclosure Process in Alberta
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Unfortunately, we have had a number of foreclosed properties to list for sale lately.  If you are experience financial stress, please talk to your lenders sooner than later!  

What is foreclosure? It is a legal process for a mortgagee (lender) to sell, or take ownership of, a property when the owner defaults on the mortgage. When you sign a mortgage, you enter an agreement to buy the property, if you aren't making the payments, or have allowed significant damage to the property, for example, you have broke that contract. 

When purchasing a "foreclosure" there are significant differences in the process of an offer being accepted and in the warranties and representations that will be included.  Buyers need to understand that the process is different and there are more risks involved.

If you are the property owner and you've failed to meet your mortgage obligations, you will be receiving a Statement of Claim.  The Statement of Claim may be filed once a mortgage is one payment behind, but usually is filed after the mortgagee is two or three months in arrears. The Statement of Claim basically states why the bank is asking the Court to foreclose on your property.  Once served, the Defendant (owner) has 20 days to file a response.  Your response may vary, and please see legal advice to ensure you know your options and their consequences.  Whether you negotiate a quit claim, file a demand notice, or statement of defence, it will be up to you and your legal counsel to determine your best course of action.  After the pleadings have closed, the Plaintiff's lawyer orders an appraisal (Affidavit of Value) to establish the value of the property.  This Affidavit of Value will have two values- the opinion on Market Value and a "Forced Sale" Value.  

Where there is significant equity in the property, the Court will grant a Redemption Order which declares the amount ownig on the mortgage, grants a redemption period of between 1 day and six months, and then provides for a Judicial Sale Listing to commence once the redemption period expires.  

As you can see, it will be at least two or three months, but more often eight or nine months from the time a foreclosure action is commenced to when a property can be listed for sale.   Throughout this time, the Defendant has the ability to payout the mortgage and costs in order to halt the process.  

Once the redemption period has expired, the court may order the sale of the property.  In Alberta, the court decides who the foreclosure property will be sold to and for what price.