How Foreclosure Works in British Columbia and How Long It Takes

Being served with a foreclosure petition is frightening, but it is a court process with steps, deadlines and rights for the homeowner. Knowing the steps helps you act in time.

This article walks through how foreclosure generally works in British Columbia, what the redemption period is, and why no one can give a single reliable timeline. Because the details depend on your file, speak with a lawyer as soon as you are served.

This article covers the law of British Columbia.

How a foreclosure starts

A foreclosure or redemption proceeding in British Columbia must be started by petition in the Supreme Court under Rule 21-7 of the Supreme Court Civil Rules. The petitioner serving the petition must include the informational notice in Form 125. People whose interest is to be extinguished must be made respondents.

If you are a respondent, you may file a response to petition. Read the documents carefully and note any deadlines on them.

The steps in the process

• The proceeding starts with a petition in the Supreme Court, which is served on the respondents together with the Form 125 informational notice.
• The court may set a redemption period, take an account of the amount owing and daily interest, and decide priorities.
• If the respondent does not pay within the court-ordered period, the petitioner may apply for a final order of foreclosure.
• The court may instead order a sale, and may grant further relief.

Redemption means paying what is owing to keep the property. A respondent who pays the amount due may serve a notice to assess costs, and if the petitioner does not file a bill of costs within 14 days the petitioner loses entitlement to costs.

How long does it take?

There is no single timeline. The court sets the redemption period. For agreements for sale, the Law and Equity Act fixes redemption at 6 months unless circumstances justify a shorter or longer period, and the court may extend a redemption period before making an order absolute. For ordinary mortgages, a six-month period is commonly applied, but the period is set by the court.

Total time also depends on whether the petition is opposed, how quickly hearings can be scheduled, and whether a sale is ordered. A lawyer can give you a realistic estimate for your file.

Practice Direction PD-66 on foreclosure proceedings requires in-person attendance for foreclosure proceedings in regular chambers, while Rule 21-7 applications other than approval of a sale may be in virtual chambers. Check the current version of the practice direction before any hearing.

Sale instead of foreclosure

A party of record may apply at any time for an order that the property be sold, rather than waiting out redemption. Before the redemption period expires, the person with conduct of sale may apply for an order confirming the sale, directing proceeds and vesting title in the purchaser.

The court may also direct a sale as an alternative to foreclosing the right of redemption, on terms it considers just. Whether a sale makes sense for you depends on your situation, so it is worth confirming with a lawyer.

Relief when you have fallen behind

The court has some power to soften the effects of a default. Under the Law and Equity Act, where a default makes payment due earlier than it otherwise would be, the court in a proceeding to enforce a mortgage of land may relieve any person from the consequence of the default, despite a contrary agreement. The court may also relieve against penalties and forfeitures and attach conditions. Whether either helps you depends on your facts.

It is also worth checking the amount the lender claims. Under the federal Interest Act, a mortgage cannot impose a fine, penalty or rate of interest that increases the charge on arrears beyond the rate payable on principal not in arrears.

Outside court, the Financial Consumer Agency of Canada says to contact your lender as soon as possible if you cannot make payments. Options it lists include:

• Payment deferral, usually up to 4 months.
• Extending the amortization or capitalizing arrears.
• Interest-only periods, special payment arrangements or blend-and-extend.
• A sale-by-borrower plan, usually 90 days or less.

Relief has a cost: unpaid interest is generally added to the balance and interest then accrues on it, so relief measures may increase the total cost over the life of the mortgage. Federally regulated lenders are expected to contact borrowers at risk and discuss relief for principal residences, but that expectation does not bind non-federally regulated lenders such as private lenders.

What to do next

• Note the date you were served and every deadline in the documents.
• Get legal advice quickly, before any response deadline passes.
• Collect your mortgage, statements, and proof of any payments.
• Ask the lender for an up-to-date statement of the amount owing.
• Consider whether paying out, refinancing or selling is realistic.
• Contact your lender as soon as possible if you cannot make payments, and ask which relief options it offers.

Frequently asked questions