What Is an Order Nisi in an Alberta Foreclosure?

Hearing the words order nisi can be alarming. It usually means the lender has started a court action on your mortgage and the Court has made an order setting out what must happen next. It does not mean your home has already been lost.

This article explains in plain words what an order nisi is, how the redemption period fits in, and what you may still be able to do. Your own situation can turn on details such as the type of mortgage and who signed it, so a lawyer can confirm how this applies to you.

This article covers the law of Alberta.

What an order nisi is

In Alberta, foreclosure is governed by Part 5 of the Law of Property Act together with the Alberta Rules of Court. A lender cannot simply take your property. Enforcement runs through a court action, and the lender's right in an action on a land mortgage is restricted to the land the mortgage relates to.

Order nisi is the traditional term for the order the Court makes in that action. The Act requires it to say that, if the defendant does not pay as ordered, the land is to be offered for sale at a time and place the Court sets. The Rules of Court use the term redemption order in the foreclosure rules, so you may see either name on court documents.

The redemption period

The redemption period is the time you have to pay what the order says is owing and keep the property. 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.

The Court can decrease or extend that period. For non-farm land it may look at 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, and whether the failure to pay was due to temporary or permanent unemployment or other conditions beyond your control. For farm land the weather and farming factors differ, such as hail, frost, drought and agricultural pests.

The amount you must pay to redeem is set in the order. Its parts, such as interest and costs, are set out there, so read it closely and ask the lender's lawyer for an up-to-date figure in writing.

What happens if the period passes without payment

If you do not pay as ordered, the land is offered for sale at the time and place the Court sets. If that sale fails, the Court may order the land offered again or make a vesting order. In some cases the Court can make a vesting or cancellation order without first offering the land for sale, for example where the land was abandoned or is undeveloped non-farm land.

An order of foreclosure, once made absolute, vests title in the lender free of your right of redemption, satisfies the debt, and entitles the lender to a certificate of title. That is why the time before that point matters so much.

What you can still do

• Pay the amount owing within the redemption period to keep the property.
• Ask the Court to postpone the day fixed for redemption; an order nisi can be relieved against this way at any time before the land is sold under an order for sale.
• File a statement of defence or a demand for notice, so that you are served with notice of the lender's applications. A statement of defence is due within 20 days if you were served in Alberta.
• Ask the Court to decrease or extend the redemption period based on your circumstances.
• Sell the property or refinance to raise the money, which is a practical choice rather than a court step, and worth discussing with a lawyer first.

If you do not file a defence or a demand for notice, the lender must note you in default before applying for personal judgment or certain remedies. Without a filing, you may not hear about later steps. A judge's decision to postpone the redemption day can be appealed only on the ground that the discretion was not exercised judicially.

When the usual rules do not apply

Any waiver or release of the sale-first protections in section 40 is void. Do not sign anything agreeing to an order without first understanding what you are giving up.

What to do next

• Read the order and note the date it was granted, the redemption date and the amount owing.
• Gather your mortgage, any guarantees, the statement of claim and every court document you have received.
• Check whether the property is residential, farm land or an investment property, and who the borrowers are.
• Speak with a lawyer soon about whether to ask for more time, file a defence or demand for notice, or arrange a sale or refinance.
• Keep copies of all letters and payments.

Frequently asked questions