Foreclosure Process in Saskatchewan on a residence is relatively similar to that of a commercial foreclosure. Foreclosure Process in Saskatchewan for farms have their own unique procedure.
Foreclosure Process Saskatchewan
A lawyer receives in a foreclosure action is to send a demand letter to the borrower requesting payment of the
arrears within a specified time (i.e., ten days), failing which legal proceedings are to be commenced.
While it is not a necessary step in the proceedings (assuming that the mortgage is not payable “on demand”) a demand letter on occasion results in the arrears being paid or an acceptable proposal for repayment being made.
The demand letter is not necessary except where the mortgage is payable on demand.
• Statement of Arrears including:
(i) arrears of principal and interest;
(ii) arrears of tax installments (if any);
(iii) accelerated principal; and
(iv) any other expenses incurred by your client in maintaining its security including payment of property taxes and/or fire insurance premiums on behalf of the borrower.
•A copy of the mortgage and, where applicable, any extension or assumption agreements that apply to the mortgage.
It is also a good idea at this time to advise the lender to ensure that fire insurance coverage has not lapsed, that vacancy insurance should be considered if the property is vacant, and that the utilities are being maintained.
The latter is especially important in the winter months as substantial damage to the mortgaged premises can occur if the electricity and gas are cut off due to non-payment by the borrower.
Most institutional lenders have blanket policies in place to cover these contingencies.
The Saskatchewan provincial Mediation Board tries to help people avoid going to court. The Board encourages parties to find a mutually acceptable arrangement for the payment of arrears and not sue or be sued.
Some basic terms and ideas:
A “mortgage” is a debt secured by registration against a title to land.
“Saskatchewan foreclosure ” is an action in court to take the land because the mortgage is not being paid.
Lenders can only Saskatchewan foreclosure on land in Saskatchewan by an action in the Court of Queen’s Bench.
A lender may seek to either take the title to the land and become the owner, or be allowed to sell the land apply the sale proceeds to the debt.
When a borrower misses payments on a debt, the lender may enforce payment by legal means of seizing the security. When the security is a mortgage on land, lenders must first give notice to the Board that they intend to foreclose. The lender must then wait for 30 days before they can start the foreclosure process in court. These thirty days provide an opportunity for the Board to talk to borrowers and help them consider options:
- payment of the arrears
- sale of the property
- quit claim the property and turn it over to the lender
- such other action as is within the financial means of the borrowe
- Borrowers may also wish to consider
- consulting a lawyer
- defending the action
Mortgage contracts typically provide that all expenses of the lender to enforce the mortgage may be added to the mortgage debt and collected from the borrower. Lawyers bill lenders for their work to sue people and foreclose on their land. The lender pays the legal fees and adds those fees to the amount owing on the mortgage. Legal fees add to the arrears and compound the problem of catching up the mortgage payments. Early payment of mortgage arrears may avoid liability for substantial legal fees.
There is substantial protection for people who wish to pay the arrears.
Saskatchewan foreclosure actions take time. It is unlikely that a Saskatchewan foreclosure action can be completed in less than six months from the time that the lender sends the file to a lawyer for collection, and may take much longer if the borrower makes payments and is trying to protect the property. Legal fees will be added to the arrears during the process. Those legal fees will add to the problem of catching up the arrears. Early payment of arrears reduces legal costs.
We believe the information contained in this article to be accurate. It is presented with the understanding that we are not engaged in rendering legal, accounting, or investment advice. When professional assistance is required, utilize the services of a licensed real estate broker, lawyer, accountant, or other consultant as may be required.
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