If you can’t reinstate or redeem your mortgage, your lender can start a court action to foreclose on your mortgage. This usually happens after you’ve missed three months of payments. But it can happen sooner.
To start the court action, your lender’s lawyer files a petition in a Supreme Court registry and registers a certificate of pending litigation in the land title of office. If your home is located where there’s a Supreme Court registry, your lender’s lawyer must file the petition in the local registry, unless you agree to a different court registry.
If this isn’t the case, they must still file at a registry within the local judicial district. This is called the local venue rule. This rule prevents, for example, Vancouver-based lawyers from starting foreclosure actions in Vancouver when the property is in Kelowna or Prince George, without your consent.
The petition contains a list of what your lender wants the court to do, including:
- Confirm that the mortgage and the debt exist.
- Confirm the amount you owe, including principal plus daily interest, legal costs, and other costs.
- Set the length of time you have to redeem your mortgage.
- Grant a personal judgment for the mortgage debt (and in some cases unsecured debt that you may owe) against you and any guarantors.
- If there’s a dispute over how much you owe, refer the file to a registrar (court official) for an accounting (calculation backed up with evidence).
- In some circumstances, give your lender control of your property’s sale.
- In some cases, request an Order Absolute instead of a redemption period and Order for Conduct of Sale. If the court grants the Order Absolute, your lender takes title to your home and everyone living there must immediately move out.
Attached to the petition is at least one af davit. The af davit is a written statement from your lender, swearing that the list of facts in the petition is correct. The af davit may include a copy of your mortgage, the title search, tax bills, and related documents.
Generally, the petition and af davit must be personally served on you (given to you in person) by a process server. If the process server has trouble nding you, the court rules may allow the petition to be served on you by alternative service.
This means the court may direct that the petition and af davit can be served on an adult at your home (such as your spouse), posted on the door of your home, printed in the notices section of a local newspaper, and/or emailed or mailed to you. Your lender can add the cost of service to what you already owe.
The petition and af davit are also served on tenants or adult occupants of your home and anybody else who has a registered charge against your home for money you owe them. These charges would be paid out of the sale proceeds of your home. Examples of other registered charges are judgments and builders’ liens.
Article Source: Legal Services Society, BC