Knowing the Alberta foreclosure process is necessary if you are involved with a mortgage in default. If you are a home owner, a Canadian real estate investor or even a bank, you should know the Alberta foreclosure process. Alberta foreclosure is the process the lender uses to get the money that you should have paid earlier back if your mortgage loan has been defaulted. If you are facing foreclosure in Alberta, please call 1-416-409-7300. Since 1981 we have served Canadians in need, and have helped hundreds of Canadians make their lives better. One of the main differences of the foreclosure process in Alberta, compared to other provinces, is that the Master in Chambers of the Court of Queen’s Bench of Alberta decides who the foreclosure property will be sold to, and for what price.
The most common default under a mortgage is the non-payment of mortgage payments.
If a resident of Alberta has missed one payment, the Alberta foreclosure process can legally start. But there can be other reasons too.
Acts of default under a mortgage may include:
- Failing to make mortgage payments,
- Allowing significant damage to the property,
- Failing to insure the property,
- Failing to pay taxes or condominium fees on the property.
Alberta home owners pay all costs in a foreclosure. Costs can include process servers, appraisers, lawyers, property managers, repairs etc… The home owners owes any costs incurred. This is important as a Bank or a lender (or insurer) can pursue a deficiency judgment in certain circumstances. CMHC and other insured mortgages are two examples of what commercial property owners can face when in foreclosure. This means that the borrower can seek payments from the borrow’s assets, wages, etc for any amount owing after the sale is finalized.
Upon Default, Bank or a lenders first contact Alberta Foreclosure
The bank or lenders will start talking with the Alberta Foreclosure as soon as someone misses their first payment Some will notify you by calling or writing a letter. If the missed payment can immediately be paid, this will typically end the Alberta foreclosure process. Alberta Property owners should not ignore the communication from the lender. If there is a situational issue, some mortgages have provisions for a single missed payment. Missed payments due to non sufficient funds (NSF) usually have a financial cost to them ranging from $150-$500.00.
In the Alberta foreclosure process a demand letter is usually sent after the second missed payment.
A lawyer, collections company, bank or lender can all send you this letter. The Alberta foreclosure will commence if the land owner can not pay arrears, and the letter will always say this.
The Court of Queen’s Bench files this claim. Lawyers will make the borrower pay all costs associated with the Alberta Foreclosure process once the process is started. The lawyer will file a notice on the title to the property. The foreclosure action has been started once this notice goes out, and it notifies all people who have a title on the property.
In Alberta, the home owner has a right of redemption.
The home owner can end the Alberta foreclosure process by paying the arrears, and if the lender allows it, making arrangements to pay the arrears. The home owner can do this until the court makes a final decision.
There are a few defenses to Alberta Foreclosure. If there is an error in the amounts owed or paid there is a defense, but otherwise there is nothing else. If the amount owed is very low, then the borrower can file a defense. There can be dispute about amount and legal fees, etc.
To be kept up to date on the Alberta Foreclosure Process, the borrower can demand a notice.
If the home owner is trying to sell the property themselves or save money to pay arrears, this notice requires the Bank or a lender to go through all the Alberta foreclosure process steps and allows a borrower to not be surprised as to then the final Alberta foreclosure will occur.
Unfortunately, this is a frequent choice the home owners facing Alberta foreclosure make.
This will make the bank or lender note the borrower in default. They will be noted in default once the notice period has passed. On the statement of claim it will state how much time the home owner has to respond. The bank or lender can skip the rest of the process and jump straight to the end if this happens.
A quit claim is when the home owner gives the title to the bank or lender.
If the owner is considering a quit claim, the should seek legal advice because it may lose them rights and have financial repercussions.
If the home owner is Consenting to Alberta foreclosure, they should also seek advice. It might let the home owner live in the home longer, but it will have many repercussions.
The Redemption Period is the time the court allows the home owner to pay back arrears.
The time will vary from court to court. There are numerous factors that determine the length of the redemption period. The single biggest factor is the amount of equity in the property.
When an Alberta home is put on sale due to foreclosure, it is called a Sale ordered by the court. Many methods of sale have been used in Alberta over the years. Advertising by tender notice in newspapers, by tender notice posted at the Court House, actual on site auctions and listing the property with a realtor are just some examples.
How the property is sold is determined by Master in Chambers of the Court of Queen’s Bench of Alberta. All agent fees are paid by the home owner. All offers are presented to the Master in Chambers. The Master in Chambers of the Court of Queen’s Bench of Alberta determines which offer is fair, and if it should be accepted. The sale proceeds are used to pay back all debt(s), in priority order, on title. The home owner receives all remaining funds.
If the Bank or lender wants the property, they may take it in satisfaction of the debt. This is called an order for Alberta Foreclosure.
This process is very different from a judicial sale. The Alberta foreclosure order may lead to a deficiency judgment.
Please contact Professional real estate investors at 1-416-409-7300 so we can help you. You can also learn how to by pre foreclosure properties in Alberta by attending our Live seminar and eye witness training.
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