Real Estate Ii Module 8

Front 1

Once the Mortgagor defaults on their mortgage, the Mortgagee commences a ______in court _____.

Back 1

FORECLOSURE ACTION

to have the property sold to satisfy the debt

Front 2

The procedural aspects of foreclosure actions are governed by:

•The substantive law is found in:

-______, R.S.A. 2000 cL-7 Part 5 – Enforcement of Mortgages and Agreements re Sale of Lands

Back 2

Rules of Court

The Law of Property Act

The Land Titles Act Sections 57 and 58

Front 3

The Land Titles Act Sections 57 and 58 state:

On the transfer of land subject to a mortgage, the Transferee:

1.Is bound by _____

2.Must indemnify the Transferor from ____

Back 3

the terms of the mortgage

any liability under the mortgage

Front 4

This means that when a person ASSUMES a mortgage, he/she takes on ______as the original Mortgagor

•It is as though he/she signed the mortgage her- or himself

Back 4

the same responsibility and legal liabilities

Front 5

The two aspects of the mortgage – the promise to pay and the charge on the land – give rise to two actions on default:

1.An _____ action (“_____”) against the

2.An _____ action (“______”) against _______.

Back 5

in personam. against the person

Mortgagor personally for breach of promise to pay

in rem. against the thing

the land to have it sold to satisfy the mortgage debt

Front 6

Judgment is sought against the guarantor in the event

Back 6

there is a deficiency after the mortgaged property is sold

Front 7

a JUDICIAL SALE

Back 7

In Alberta, the property can be sold only by way of a court order

Front 8

In Alberta, a mortgage is a ______, NOT a ______.

•The Plaintiff is asking the court to have _______ debt

Back 8

charge on the land transfer of land

the mortgaged property sold and the sale proceeds applied to reduce the mortgage

Front 9

The court has the power to: 3

No sale becomes final until _____

Back 9

Set the terms and conditions of the sale

-Order that the property be listed for sale with a realtor

-Order that the property be sold to the plaintiff Mortgagee

it has been approved by the court

Front 10

Formal process

First, _____is filed

•The defendant mortgagor has _____ days to file their _______.

If so, the matter proceeds to various ______.

Back 10

STATEMENT OF CLAIM is filed.

•The defendant mortgagor has 20 days to file their STATEMENT OF DEFENSE.

•If so, the matter proceeds to various APPLICATIONS

Front 11

After the defendant is _______,

OR

After a ______ is filed,

OR

After the ______

AND

________.

the plaintiff is required to make an application in _____ for a _____

Back 11

NOTED IN DEFAULT

DEMAND FOR NOTICE

STATEMENT OF DEFENSE

Any APPLICATIONS have been resolved

Master’s Chambers

Redemption Order

Front 12

Redemption Order

aka ______

This order provides: 2

Back 12

Redemption and Method of Sale Order

This order provides:

1.The length of the redemption period; and

2.Upon the lapsing of the redemption period, instructions for advertising the property for sale and a deadline for tenders (offers to purchase) to be received

Front 13

The length of the redemption period is the length of time

Back 13

the defendant has to redeem the mortgage by bringing it into good standing or by paying it out if the mortgage has matured

Front 14

After the deadline for tenders has passed, it is necessary for the plaintiff to _____.

•This happens whether or not ______.

Back 14

make a second application to Master’s Chambers to confirm details of the sale

the property is sold to a successful tender or to the plaintiff

Front 15

When a plaintiff asks the court for an Order for Foreclosure, it is asking the court to _____.

Back 15

transfer TITLE to the mortgaged property into the plaintiff’s name in exchange for forgiveness of the debt

Front 16

There are two effects of an Order for Foreclosure:

Back 16

1.Title to the property vests in the name of the MORTGAGEE free from all rights of the owner and free from all encumbrances registered on title after the mortgage

2.An Order for Foreclosure operates in FULL satisfaction of the debt

Front 17

When an Order for Foreclosure extinguishes a debt – that’s it, there is no longer any debt

There can be: 3 No

-

Back 17

No judgment against the defendant Mortgagor

-No judgment against any guarantors of the mortgage

-No fight to pursue any other security pledged as collateral for the debt

Front 18

If the Mortgagor has given collateral security, all collateral security must be realized _____

Once the order has been obtained, the debt is _____ and the plaintiff has no right to _____.

Back 18

BEFORE obtaining an Order for Foreclosure

extinguished

proceed on any other security

Front 19

It is possible for the plaintiff to go directly to an application for a _________ without having to first obtain a ______.

Back 19

Order for Foreclosure

Redemption Order

Front 20

No Redemption Order: 4

-When the defendant Mortgagor ______.

-When the defendant Mortgagor ______.

-If the mortgaged property is _____.

-If the mortgaged property is _____ but not _____.

Back 20

signs a Quit Claim

consents to a Final Order for Foreclosure

abandoned

raw land

Front 21

The covenant to pay is .

Back 21

the promise in the mortgage document to make all payments under the mortgage when they are due

Front 22

In Alberta, the rights of the Mortgagee are limited to _______ (except in a limited number of cases!)

You cannot sue the _____.

Back 22

the recovery of the land

Mortgagor on the debt

Hint 22

Mortgagor on the debt

Front 23

FINAL ORDER FOR FORECLOSURE – debt is ______.

All other cases, while you are prohibited from suing the Mortgagor for the debt, _____

Action can be taken against _____.

Back 23

extinguished

Debt still exists

any Guarantor of the debt or against any collateral security

Front 24

If the property is INCOME PRODUCING, a _____.

Back 24

Receiver or Receiver/Manager can be appointed to capture the income from the property

Front 25

Receiver vs Receiver Manager

Receiver: can only _____.

•Receiver Manager:

Back 25

collect rents from the mortgaged lands

takes over full control with all the powers of management and operation of the property

Front 26

Depending on the security agreed upon, it is possible that a Receiver or Receiver Manager can be appointed _____.

In this case, they are acting as _____ for the Mortgagee

The Mortgagee is ____ for their actions

Back 26

under the agreement without any court involvement

AGENT

liable

Front 27

Most commonly in foreclosure actions, a Receiver or Receiver Manager is appointed by ____.

Their powers and duties are _____.

They are _____and not ______.

Back 27

court order

set out in detail by the court

an officer of the court

an agent of the Mortgagee

Front 28

For small properties, the court may require the _____ to act as the Receiver in order to reduce costs

In other cases, a _____ will be appointed as Receiver Manager

Back 28

Mortgagee

management company nominated by the Mortgagee

Front 29

Any rents or profits recovered by the Receiver or Receiver Manager are applied as follows:

3

Back 29

1.Receiver’s remuneration

2.Property taxes

3.Reduction of the mortgage debt

Front 30

Any rents or profits recovered by the Receiver or Receiver Manager are applied as follows:

3

Back 30

1.Receiver’s remuneration

2.Property taxes

3.Reduction of the mortgage debt

Front 31

This right is called the EQUITY OF REDEMPTION

The right of redemption continues until ____.

Back 31

The Mortgagor has the right to pay all arrears and costs owing under the mortgage to bring it into good standing or payout the mortgage in full if it matured

the property is sold to a third party

Front 32

In certain cases, subsequent encumbrancers have the same right to ______.

•Upon payment, they have the _______in the mortgage assigned to them and they stand in the same shoes as the _____.

Back 32

redeem

Mortgagee’s interest

Mortgagee

Front 33

When a plaintiff Mortgagee makes an application for an Redemption Order, the Master will set a time limit within which _______.

Back 33

the defendant Mortgagor must redeem their property

Front 34

If the Mortgagor fails to redeem during the time period, ______.

During this time period, the plaintiff Mortgagee cannot ______.

Back 34

the property is advertised for sale

take further steps in the foreclosure action

Front 35

The time fixed for redemption is:

The court has the ability to ______ depending on the ______ and other factors set out in the statute

Back 35

1.One year for farm land

2.Six months for all other land

decrease or extend the redemption period

equity in the property

Front 36

A mortgage will often contain a provision requiring the Mortgagor to _____ if the mortgage is paid out before the term

Once a Statement of Claim has been issued seeking the full amount of the mortgage, a Mortgagor is entitled to _____.

Back 36

pay a penalty

pay off the mortgage WITHOUT ANY PENALTY

Front 37

When a mortgage is insured by the CMHC, prior to any payment from the CMHC to the Mortgagee, the CMHC requires the plaintiff Mortgagee to register a ______ and that ______.

Back 37

WRIT OF ENFORCEMENT for any deficiency

judgment be assigned to the CMHC

Front 38

Upon receiving instructions from your client, you need to: 3

Back 38

Open a file

Check conflict system (for what?)

-Review mortgage documents

•Mortgage renewal agreements

•Guarantees

•Collateral security documents

Front 39

Upon receiving instructions from your client, you need to: 3

Back 39

Open a file

Check conflict system (for what?)

-Review mortgage documents

•Mortgage renewal agreements

•Guarantees

•Collateral security documents

Front 40

Some mortgages or collateral security agreements (i.e., guarantees) require that a _____ prior to commencing legal action

Often a Mortgagee will instruct the law office to _____, hoping ______.

Back 40

written demand be made

send a demand letter

that will be enough to get payment and not have to commence litigation

Front 41

Necessary searches 5

Back 41

Title

Taxes

Personal Property Registry

Condominium Corporation

Corporate Registry

Front 42

Items to check on the Title to the property:3

Back 42

a)Current registered owner = Mortgagor

▪If not, obtain copies of all the different titles from the time the mortgage was registered up to the current date (along with the Transfers of Land that created those titles)

b)Prior encumbrances

▪Write any prior encumbrancers to inquire as to the balance owing on their security

▪Important to know what equity the Mortgagor has in the property

c)Subsequent encumbrances

▪Notice of the applications must be sent to all subsequent encumbrancers

Front 43

Search the taxes to the property, make sure ____.

_____ will have priority over the mortgage debt

Back 43

they’re current

Any tax arrears

Front 44

Personal Property Registry

Search to see if

Back 44

any chattels form part of the collateral security given to the Mortgagee

Front 45

If the property is a condominium, check with the condominium management company for _____.

Since the new owner will be _____, condo fees are treated like ____.

Arrears of condo fees have priority over the ____.

Back 45

arrears in condo fees

liable for these arrears

taxes

mortgage debt

Front 46

If the Mortgagor is a corporation, search the _____.

Back 46

Corporate Registry for the registered office

Front 47

Quick and inexpensive alternative to foreclosure proceedings

Back 47

•If there are no subsequent encumbrances on title, it is possible to use a QUIT CLAIM and Transfer of Land

Front 48

Quit Claim:

In exchange, the Mortgagee _____.

Where no _____ is available, the Mortgagee gives up _____.

The process is accomplished by filing a ______.

Therefore, the Mortgagee takes the ______.

Back 48

an agreement whereby the Mortgagor agrees to transfer his/her interest in the mortgaged property to the Mortgagee

gives up any claim it may have under the mortgage for deficiency judgment

deficiency judgment

any right to name the Mortgagor in a legal action

Transfer of Land WITHOUT a court order

Mortgagor’s title exactly as it stands

Front 49

If there are subsequent encumbrancers on the title – _____ is NOT an option

•If there are subsequent encumbrances to the mortgage, HAVE to proceed by way of _____

Back 49

Quit claim

Statement of Claim and consent to a Final Order for Foreclosure

Front 50

____ will have to be given to ______ for the ____ to give them the opportunity to _____.

Back 50

Notice

all subsequent encumbrancers of the application

Final Order for Foreclosure

object if they wish