Alberta is a Canadian province with a population of more than 3.5 million people. Single homes and condos are widely popular in this city.
While buying a home here is an ideal choice, if a borrower cannot repay a home loan amount within a specified date, the lender or the bank can apply for a foreclosure process Alberta.
The lender can imply a mortgage foreclosure to recover a balance loan amount legally in Alberta. Dealing with a foreclosure can be a tedious experience for a homeowner.
Read on to understand how the legal proceeding works in Canada.
What is a Foreclosure Process?
According to recent statistics, in Alberta, urban housing started totalling 2,660 in August 2021, a year-over-year increase of 53.1 percent.
Foreclosure is the legal method whereby a lender can take possession of a property and initiate a resale when the borrower doesn’t pay the mortgage on time.
The bank or lender resells the property at a foreclosure auction to recover the default loan amount from the borrower. The procedures vary according to different states, residential or commercial property, and the individual terms of an agreement between the two parties involved.
Steps in Foreclosure Process in Alberta
A foreclosure procedure in Alberta starts after the first missed payment from the borrower.
According to the Centre for Public Legal Education in Alberta, three primary laws govern the foreclosure procedures for homes in Alberta. These include:
- The Law of Property Act
- Land Titles Act
- Alberta Rules of Court
Here are the basic steps that bankers will use to seek mortgage payments from borrowers.
Initial Notice to the Borrower
The first step that the lender takes is to remind the borrower of one or two missed payments. The borrower will receive a default notice, an official letter, or a reminder call demanding the pending fees.
If the borrower fails to acknowledge the letter, the banker goes to the next step to get back their money.
File a Statement of Claim Through Court
The next step is sending a statement of claim with the help of an attorney in Alberta. You can find many licensed real estate law firms in Canada to fight your case in such a situation.
The claim statement will include the pending fees and the grace period to repay the amount.
File a Statement of Defense
If the borrower cannot pay back the amount, they can file a statement of defence to fight their case against the lender. The borrower can give a list of legitimate reasons to defend the lawsuit.
If they cannot give worthy reasons, the default fees and the cost of final judgment will increase.
Negotiating a Consent Order
A borrower can also negotiate to extend the grace period for repaying the amount. It gives time for homeowners to sell the property and pay back the money to banks on time.
The court can also grant a redemption period of about six months to help the borrower arrange for funds. After the period is over, the court will pass the final judgment on how the property will be dealt with.
It is necessary to understand the foreclosure process in Alberta in detail before you apply for credit to buy a property in Alberta.