Can a Lender Sue You for a Shortfall After Foreclosure in Saskatchewan?

If you are behind on your mortgage, you may be afraid of a double loss: the property is sold, and the lender then comes after you for the difference between what you owed and what the property brought in. That difference is often called a shortfall or deficiency.

Whether a lender can pursue you personally depends on the details of your mortgage and the court process, and a general article cannot answer it for your file. What it can do is explain the steps Saskatchewan requires before foreclosure, and where you have time and help available to act.

This article covers the law of Saskatchewan.

How foreclosure starts in Saskatchewan

A mortgage lender on land in Saskatchewan can foreclose only by an action in the Court of King's Bench. The lender must first give notice to the Provincial Mediation Board (PMB) under The Land Contracts (Actions) Act, 2018, by serving the mortgagor and the PMB with a notice of application for leave.

This means a lender cannot simply take the property and sell it. A court process, with notice to you, comes first.

The waiting period and the PMB

The notice of application for leave must be served at least 60 days before the hearing date. The lender must wait 60 days after notifying the PMB before starting the court foreclosure process. A foreclosure is unlikely to be completed in under six months from when the lender sends the file to a lawyer.

The PMB uses the notice period to talk with the borrower about options such as paying arrears, selling the property, or transferring it to the lender. That window is your chance to explore choices that may avoid a shortfall in the first place.

When a shortfall can arise

A shortfall exists when what is recovered from the property is less than what is owed, including costs. Whether the lender can then claim the difference from you personally depends on the terms of your mortgage, who signed it or guaranteed it, how the property is dealt with in the court proceeding and what the court orders. These are not points you should guess at.

Questions to ask a lawyer include:

• Did I sign the mortgage personally, or did someone else guarantee it?
• Does my mortgage contain a promise to pay that is separate from the security on the property?
• What does the court order in my case say about the amount owing?
• Would selling the property myself, or transferring it to the lender, change what I could owe?
• Are there limits under provincial law that apply to my type of property?

Farm land follows a different process

Farm land follows a separate process under Part II of The Saskatchewan Farm Security Act. The Farm Land Security Board reviews farm foreclosures, and mediation is involved before the creditor can go to court. If your mortgage is on farm land, the steps and protections differ from those for other land, so tell your lawyer at the outset.

What to do next

• Keep every notice you receive, especially anything from the court or the PMB.
• Do not ignore a notice of application for leave; note the hearing date.
• Contact the PMB during the notice period to discuss your options.
• Gather your mortgage documents, any guarantees and payment records.
• Speak with a lawyer early about whether you could owe a shortfall.
• Think about whether paying arrears, selling or transferring the property is realistic.

Acting during the notice period gives you the most room to choose. Waiting until the end narrows your options.

Frequently asked questions