Lenders in New Brunswick rely on power of sale, as provided for in the mortgage agreements, in       conjunction with the power of sale provisions in the Property Act. The system is started by notice,       not by commencing an action, and there is not period of default specified before the lenders can start       the power of sale process. However, in practice, lawyers advise lenders to wait until the mortgage is       three months in arrears. The borrower does not have the right to “reinstate” the mortgage at this time.       While the Property Act does not require that any notice other than a notice of the sale be sent,       lenders usually send a Demand Letter to the borrower, advising them of the default and that the       lenders may take steps to sell the property if the payments are not brought up to date. The Act       does, however, require that a notice be personally served or sent by registered mail, to the borrower,       four weeks prior to the sale. The notice is also posted in the registry office, and a public place in the       area where the property is located. As a matter of practice, the sale is often published once in the       Royal Gazette, although there is no requirement to do so.       In New Brunswick, power of sale does not mean that the property is immediately listed with a real       estate agent. The Property Act states that the sale can occur, “by public auction or private contract.”       It usually proceeds by auction and the lender retains a professional auctioneer. The auction takes       place in a public building, often the courthouse. At the start of the auction, the auctioneer reads the       “Bidding Papers” that have been prepared by the lender. While the content of the bidding papers is       not set out in the legislation, they usually contain:           The terms and conditions of sale.           The required deposit.           How many days a purchaser has to serve title.           The requirements that a purchaser enter into an agreement to complete the sale within 30 days.           The lender’s reserve bid – usually the opening bid.       If no one attends, or bids over the reserve bid, the lender can buy the property. If this happens, the       lender can then list the property with a real estate agent. The property would, therefore, be sold as       a result of default under a mortgage.       The Property Act sets out how the proceeds of the sale are to be applied. They are first used to pay       all costs of the sale and then are used to pay any amounts still owning under the mortgage.       While ForeclosureCanada.org strives to keep the information on this site accurate and current,       ForeclosureCanada.org cannot guarantee the accuracy, completeness, or timeliness of the       information.       << Back                                                                                                                        Top