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Friday, July 01, 2016
Saskatchewan Justice

The 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. 

"Forclosure" is an action in court to take the land because the mortgage is not being paid.

Lenders can only foreclose 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 borrower

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.  Foreclosure actions take time.  It is unlikely that a 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.

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