Served With a Foreclosure Claim in Alberta? Your Deadline to Respond

Being handed a statement of claim from your mortgage lender is stressful, and the first question is usually how long you have to respond. In Alberta, a lender enforcing a mortgage on land goes through a court action rather than a separate non-court sale route, so this document starts a formal process with real deadlines.

This article explains the time limits for responding, the choice between a statement of defence and a demand for notice, what happens if you file nothing, and what notices to expect next. It is general information, not advice on your own file. Because the details turn on your mortgage and your situation, a lawyer can confirm how it applies to you.

This article covers the law of Alberta.

Why you were served: foreclosure runs through the court

Foreclosure of an Alberta mortgage is governed by Part 5 of the Law of Property Act together with the Alberta Rules of Court. A 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 lender has one year after the statement of claim is filed to serve it on you. The Court may extend that time, but not by more than 3 months. So a claim served close to the end of that period is not automatically a problem, and the date of service matters. Note the date and place where you were served, because your response deadline depends on it.

How long you have to respond

The time to file a statement of defence depends on where you were served.

These periods come from rule 3.31(3) of the Alberta Rules of Court. Because the clock runs from service, keep the claim and any proof of when and how you received it.

Statement of defence or demand for notice

In a foreclosure action, a defendant who files either a statement of defence or a demand for notice is entitled to notice of every application the lender makes. That means you are kept informed of each step instead of finding out after the fact.

• A statement of defence sets out your response to the claim. Whether it suits you depends on whether you dispute what the lender says.
• A demand for notice is a way to stay informed of the lender's applications. A lawyer can explain when it fits your circumstances.
• Either filing gets you notice of the lender's applications.

Which one is right depends on the facts, such as whether you dispute the debt or the lender's steps. That is worth discussing with a lawyer before the deadline passes.

What happens if you file nothing

If a defendant files neither a statement of defence nor a demand for notice, the lender must note the defendant in default before applying for personal judgment or a remedy under rule 6.5(2). Notice of the lender's applications must be served on each person who filed a statement of defence or demand for notice, so filing one of them is how you secure that notice.

Doing nothing therefore risks the process moving ahead without you knowing about it. Filing something, even a demand for notice, keeps you in the loop.

What to expect next, and what to do now

Before the lender applies for a redemption order, it must file an affidavit of value, and a certified copy of all current titles to the land. 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 that period, and for non-farm land it may consider things like your ability to pay, the value of the land and whether the failure to pay was due to conditions beyond your control. Foreclosure matters may be heard by Applications Judges in Court of King's Bench chambers.

One warning: the redemption period rules do not apply to an order you have consented to. Agreeing to a consent order therefore gives up that statutory period. Also, some borrowers are treated differently, such as corporate mortgagors and certain insured mortgages.

• Write down the date, place and method of service today.
• Count your response deadline from that date using the table above.
• Keep the claim, your mortgage and any letters from the lender together.
• Decide, with advice, between a statement of defence and a demand for notice.
• Do not sign a consent order without understanding what you give up.
• Talk to a lawyer promptly, before the deadline runs out.

Frequently asked questions