Demand Payment Letter Alberta Canada

Demand Payment Letter Alberta Canada

When and if the mortgagor (borrower) defaults under the terms of the mortgage contract in Alberta, there follows a process to inform all the parties to whom the default concerns.

The lender will send a demand letter, asking for the amount owing (payment owing) to be paid in full within a certain time frame (a few days or weeks), together with a notice from the lender under the Farm Debt Meditation Act, In certain situations, a Notice of Intention is also sent to enforce security under the Bankruptcy and Insolvency Act.

 The simple meaning of the demand letter is to pay up the arrears or else we are going to sue and take the land away from you.This is where the lender wants the borrower’s full attention, making him understand that this issue must be dealt with, or he will be facing a lawsuit. At this time, the owner still has complete control and possession of the property. But after receiving a demand letter, most of the property owners will feel the urgency to either pay up the arrears or become panic sellers, and list the property for sale.

The notice states very clearly that if the debt it not fully satisfied by a specific date, then the legal proceedings will begin to recover the outstanding mortgage amount, arrears, and all other expenses incurred in order to recover that mortgage. The start of the proceedings is up to the lender and the situation. Sometimes the proceedings can start immediately; but the decision to proceed lies entirely within the lender’s power and his sole discretion.

When and if a notice of enforced security under the BIA (bankruptcy and insolvency act) is served, the lender cannot take any further action to enforce the security


The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case

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