In BC, when a borrower defaults in making the mortgage payments (or even taxes, strata fees), the lender can undergo foreclosure proceedings to sell the property used as security to get their money back. This is spelled out in the mortgage contract the borrower signs when taking out a loan to purchase a property.
The foreclosure process in BC:
1. Demand Letter – the lender’s lawyer sends the demand letter to everyone named on the mortgage including current owners and guarantors to pay out the mortgage or face foreclosure.
2. Petition – the lender’s lawyer files a formal application to the BC Supreme Court to request a judicial action which includes an Order for Sale so the court may order the sale of the mortgaged property.
3. Order Nisi – the lender’s lawyer apply in supreme court chambers for an order nisi which establishes the amount required to redeem the mortgage and the redemption period (usually one day to six months).
4. Certificate of Pending Litigation – is filed in court registry and the Land Title Office. This registration means there is pending litigation against the property.
5. Order for Conduct of Sale – the court instruct that the property be listed for sale usually by the lender’s realtor.
6. Order Made After Application – the order that approves the sale of the property.
So if you see a property listed on the MLS with the seller’s interest being “Court Ordered Sale” you know it is a foreclosure. If you happen to make an offer on a Court Ordered Sale, know that even if your offer is accepted, property inspected and deposit paid, the offer is still subject to court approval.
The court date for such approval is public information. Anyone can show up in court on the specified court date and submit an offer. The Master (not Judge) residing over the court will ask if anyone else would like to bid on the property. Then the Master will read out loud the important information on every offer such as buyer’s name, price, deposit amount, completion/possession dates and whether the proper schedule is attached.
The lender’s lawyer present at court then asks the Master to approve the highest priced offer. The Master approves the sale and the winning bidder is happy. The buyer with the accepted offer may lose the deal if the offer is not the best after bidding. I was at court today. The buyer with the accepted offer lost the deal by a couple of thousand dollars when eight other groups showed up at court to bid on the property. That’s the chance a buyer takes when making an offer on a Court Ordered Sales.
There are currently 192 court ordered sale across Greater Vancouver. For a current list of these foreclosures, please email jenny@ultimatehomeguide.ca with “foreclosures” in the subject line.