In Newfoundland, when borrowers default under a mortgage, lenders can resort to power of sale or       judicial to recover the funds owed. Power of sale is used almost exclusively because it is easier to       implement. Instead of commencing an action under the Supreme Court of Newfoundland, as in a       judicial sale, a lender simply has to send out a notice to the borrower. Like the Mortgage Act of other       provinces, Newfoundland has the Conveyancing Act that governs power of sale.       There is no specific period of default before the lender can send out the notice, but lawyers in the       province, recommend lenders wait until the mortgage payments are two to three months in default.       The wording of the notice is not laid out under the Conveyancing Act, and as a result, the notice       resembles the Demand Letter used in Nova Scotia. The letter advises the borrower of the amount       owing, with a request to bring the payments up to date. The letter also gives a date to when that       payment is due. The lender cannot take steps to sell the property unless default continues for 30       days after the notice is given. The notice is therefore commonly referred to as the “30-day notice”.       Practice in the province is to personally serve the notice to the borrower.       Borrowers do not have the right to “reinstate” the mortgage, as in Nova Scotia, and if default       continues for 30 days after the notice is given, the lender can set the date and start advertising.       Common practice is to advertise for four weeks. The lender must also obtain a written appraisal of       the property prior to the sale.       Attempts are made, before listing the property with a real estate agent, to sell the property by public       auction or public tender. Under the Conveyancing Act, the property cannot be sold for less that 75%       of the appraised value, unless a judge approves the price. If there are no reasonable offers at the       public auction or tender, the property can then be sold by “private contract”: listed with a real estate       agent.       After a sale by any method, the lender must provide an accounting to the borrower, guarantors, and       any registered encumbrancers. It must be provided within 30 days from the date of completion of       the sale. The Conveyancing Act sets out how the proceeds of the sale are to be applied. They are       first used to discharge any prior encumbrances to which the sale are to be applied, then to pay the       costs of the sale, followed by any amounts 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