How Long Is the Redemption Period in an Alberta Foreclosure?

If your lender has started a foreclosure action on your Alberta property, one of the first questions is how much time you have to catch up and keep the property. That window is called the redemption period, and it is set by the Law of Property Act.

This article explains the standard periods, how the Court can change them, and the situations where the statutory period does not apply. It is general information, not advice on your own file, so a lawyer should confirm how it fits your mortgage.

This article covers the law of Alberta.

What the redemption period is

In plain terms, the redemption period is the time the Court gives you to pay what is owing and keep the property before the lender can move to the next step. In Alberta, foreclosure is a court process under Part 5 of the Law of Property Act and the Alberta Rules of Court. The lender's right in an action on a land mortgage is restricted to the land the mortgage relates to, and enforcement runs through a court action.

The Act uses the traditional term order nisi, while the Rules of Court speak of a redemption order. Both refer to the order that sets out what you must pay and by when.

How long the period is

The period fixed in the order is 6 months from the date the order is granted for land other than farm land, and one year for farm land.

If you do not pay as ordered, the Court must provide that the land is to be offered for sale at a time and place it sets. If the sale fails, the Court may order the land offered again or make a vesting order.

When the Court can shorten or extend it

The Court may decrease or extend the redemption period. For non-farm land it may consider:

• your ability to pay
• the value of the land, including improvements
• whether the land has been abandoned
• the nature, extent and value of the lender's security
• your earning capacity
• whether the failure to pay was due to temporary or permanent unemployment or other conditions beyond your control

For farm land the factors differ slightly. The Court looks at ability to pay, the value of the land and improvements, abandonment, and the lender's security. It also asks whether the failure to pay was due to hail, frost, drought, agricultural pests or other conditions beyond your control.

Separately, the Court can make a vesting or cancellation order without first offering the land for sale in some cases. These include land transferred or sold while in default (or within 4 months before default), abandoned land, and undeveloped non-farm land.

When the statutory period does not apply

• Consent orders: the redemption period rules do not apply to an order the debtor has consented to.
• Corporate mortgagors: the protections do not apply to enforcement of a mortgage given by a corporation. An individual who is a transferee of corporate-given mortgaged land, or an assignee of an agreement for sale to a corporation, is an exception and can still rely on them.
• Insured mortgages: the protections do not apply to a mortgage securing a National Housing Act loan, or to a high-ratio mortgage insured by a licensed mortgage insurer. This extends to renewals of those mortgages and to mortgages entered into before the subsection came into force.

Any waiver or release of the section 40 protections is void. Whether your mortgage is high-ratio or insured is a detail worth confirming with a lawyer.

Postponing the redemption day, and your right to notice

An order nisi may be relieved against by postponing the day fixed for redemption, at any time before the land is sold under an order for sale. Where a judge has postponed the redemption day, an appeal is allowed only on the ground that the judge's discretion was not exercised judicially.

Participation matters. In a foreclosure action, notice of every application the lender makes must be served on each person who filed a statement of defence or demand for notice. If you file neither, the lender must note you in default before applying for personal judgment or certain remedies.

The time to file a statement of defence is 20 days if you are served in Alberta, one month if served elsewhere in Canada, and two months if served outside Canada.

What to do next

• Find the date on any order and work out your redemption day from it.
• Note the deadline on your statement of claim for filing a defence or demand for notice.
• Gather your mortgage documents, including renewals, and check whether it was insured or given by a corporation.
• Collect proof of income, unemployment or other circumstances you may want the Court to consider.
• Speak with a lawyer before the redemption day passes, so any request to postpone or extend is made in time.

Frequently asked questions