Jun 01, 2020
THE NEW REALITY: PRIVATE MORTGAGE DEFAULTS - POWER OF SALE & FORECLOSURE - Part XIII of a Series – Notice of Sale Do’s and Don’ts
Mortgage remedies are tricky. Because, at least in part, notices of sale are tricky. Your mortgage remedy lawyer will know that there are many technical rules that do not show up in any statute or government regulation. These rules, sometimes called ‘common law’ rules, are the result of decades of judicial interpretation resolving lawsuits challenging the validity of a private mortgage lender’s notice of sale. Or, perhaps, challenging the mortgagee’s ability to sell the mortgage property using the mortgage lender’s power of sale remedy (after issuing the notice of sale).
Two of the most important common law rules dealing with notices of sale are that
- the notice of sale must properly identify the mortgage in default. One might ask, but what is “proper identification”? The answer gleaned from the case law is that the notice of sale must sufficiently identify the mortgage in default so that people or corporations who receive the notice of sale will know which mortgage is the subject of the notice of sale; that is, exactly which mortgage encumbering what piece or pieces of real property is in default
- the notice of sale must set out the principle and the interest and the costs owing under the mortgage in default so as to allow the mortgagor / homeowner the ability to redeem the mortgage and pay it off in full.
The notice of sale must also set out a full and clear description of the mortgaged property – clear enough so as not to be misleading. The notice of sale must be signed by the mortgagee or on the mortgagee’s behalf. It must give the mortgagor / homeowner at least 35 clear days’ notice of the mortgage lender’s intention to sell the mortgaged property under the mortgage lender’s power of sale (see Part XII for details of the 35 'clear' days rule).
While mishaps and errors in the notice of sale can render the notice invalid – and prevent the mortgagee from selling the mortgaged property, the common law provides that minor errors in the notice of sale including in the amounts stated to be due and owing under the mortgage are not always fatal to the validity of the notice of sale.
The next post will look at CRA liens and super priority. As always, this blog is intended for information purposes only. It is not legal advice and cannot be relied on as such. Nor is it a substitute for hiring your own legal counsel, who will be an essential member of your mortgage default and mortgage remedy team. And lastly, this blog is just my opinion. I reserve the right to change my mind. And I reserve the right to be wrong.
Be well and stay healthy.