Can I Sell My House During Foreclosure in Alberta?

If your lender has started a foreclosure action, selling the home yourself may seem better than waiting for the Court to deal with it. Whether and how that works depends on timing, the payout figure and the lender's cooperation.

This article explains the court framework around the time you have, and what to line up before you list. The details depend on your mortgage and the court orders in your file, so confirm them with a lawyer.

This article covers the law of Alberta.

Why timing matters

In Alberta, foreclosure is a court action under Part 5 of the Law of Property Act and the Alberta Rules of Court. The redemption 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.

The Court may decrease or extend the period, looking at factors such as your ability to pay and the value of the land. Until your right of redemption ends, paying the amount owing is how you keep the land. Once an order of foreclosure is made absolute, title vests in the lender free of your right of redemption.

How a sale on your own fits in

The statutes set out the court process, so they do not lay out a step-by-step guide for an owner's own sale. In practice, a sale on your own is a way of raising the money to redeem. You need a buyer whose closing will pay the full amount owing to the lender in time.

Because the order sets the amount owing, get an up-to-date payout figure in writing, including interest and costs.

• Check the redemption date in your order and how much time is left.
• Ask the lender's lawyer for a payout figure and how long it stays valid.
• Speak to a realtor about price and realistic closing dates.
• Have your lawyer review any offer and the closing arrangements.

Asking the Court for more time

If a sale needs more time than you have, the Court may extend the redemption period. An order nisi can also be relieved against by postponing the day fixed for redemption at any time before the land is sold under an order for sale. A judge's decision to postpone can be appealed only on the ground that the discretion was not exercised judicially.

If you want to be heard, file a statement of defence or a demand for notice. A defendant who does so is entitled to notice of the lender's applications. The time for a statement of defence is 20 days if you were served in Alberta. A defendant who files neither must be noted in default before the lender applies for personal judgment or certain remedies.

If the court runs the sale instead

If you do not pay as ordered, the order nisi provides that the land is to be offered for sale at a time and place the Court sets. The Court may offer it in a manner and at a price it considers appropriate, and may order a realtor listing. The lender can seek an order confirming a sale from tenders.

Before the final order is entered, the lender must file the statement of secured indebtedness, sale proceeds and any deficiency calculation, and an assessment officer checks the amounts. A lender on an ordinary individual's residential mortgage generally cannot sue on the covenant for payment. Guarantors and corporate co-borrowers can still be pursued for a shortfall.

What to do next

• Find your order and write down the redemption date.
• Request a payout statement and the lender's lawyer's contact details.
• Get a realistic view of your home's value before choosing a price.
• File a defence or demand for notice if you have not, so you receive notice of applications.
• See a lawyer promptly about asking for more time or arranging a sale with the lender's cooperation.

Frequently asked questions