How Mortgage Foreclosure Works in BC and How Long It Takes

If you have been served with a foreclosure petition in British Columbia, you are probably asking how long you have. There is no single fixed timeline that fits every case, because the court sets key steps and each file moves differently.

This article explains the order of events, what each step means for you and the options that may be available. It is general information, and anyone who has been served should get legal advice quickly.

This article covers the law of British Columbia.

Step one: the petition

A foreclosure or redemption proceeding 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 in the property could be extinguished must be made respondents, and respondents may file a response to petition. Because the Form 125 notice must come with the petition, read it carefully and keep it with your other papers.

Step two: the court sets terms and a redemption period

The court may set a redemption period, take an account of the amount owing and daily interest, decide priorities, order a sale and grant further relief. The redemption period is your window to pay what is owing and keep the property.

You may have heard that the period is six months. That figure appears in the Law and Equity Act s. 16(2) for agreements for sale, where redemption is fixed at 6 months unless circumstances justify a shorter or longer period. For ordinary mortgages, a six-month period is commonly applied, but the period is set by the court. The court may extend a redemption period before making an order absolute.

Step three: paying, selling or a final order

If the respondent does not pay within the court-ordered period, the petitioner may apply for a final order of foreclosure. 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.

Foreclosure is not the only route. A party of record may apply at any time for an order that the property be sold rather than foreclosed. The Law and Equity Act s. 15 also lets the court direct a sale on the terms it considers just, as an alternative to foreclosing the right of 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.

Protections and relief that may apply

• Relief from default: where a default makes payment due earlier than otherwise, the court in a proceeding to enforce a mortgage of land may relieve any person from the consequence of the default, despite contrary agreement.
• Penalties and forfeitures: the court may relieve against penalties and forfeitures and attach conditions.
• Interest limits: under the federal Interest Act s. 8, 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.
• Court attendance: Practice Direction PD-66 requires in-person attendance for foreclosure proceedings in regular chambers, while Rule 21-7 applications other than approval of sale may be in virtual chambers.

Whether any of these apply depends on your facts, so ask a lawyer how they fit your file.

What to do next

If you can still talk to your lender, do so as soon as possible. Options can include payment deferral (usually up to 4 months), extending amortization, capitalizing arrears, interest-only periods, special payment arrangements, blend-and-extend, and a sale-by-borrower plan (usually 90 days or less). Unpaid interest is generally added to the balance, and relief measures may increase the total cost over the life of the mortgage.

The FCAC Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances expects federally regulated lenders to proactively contact borrowers at risk and discuss relief for principal residences, but it does not bind non-federally regulated lenders such as private lenders.

• Note the date you were served and keep every document.
• Read the Form 125 notice and remember that, as a respondent, you may file a response to petition.
• Gather your mortgage, recent statements and proof of income.
• Contact your lender about relief options.
• Get legal advice before any deadline passes.

Frequently asked questions