Power of sale is the main remedy available to lenders in PEI, although the province’s legislation and       rules also provides for judicial. The Real Property Act provides for power of sale, where a clause is       included in the mortgage arrangements. As in Newfoundland, the system is fairly simple and is not       governed tightly by legislation. In fact, there are no legislative provisions, rules, or practice       memoranda dealing with power of sale, other than the provision in the Real Property Act.       The power of sale is started by notice, rather than an action. No period of default is required before a       notice can be sent, but lawyers in the province advise that lenders proceed after three months       default. The form of notice is not specified by legislation, so lenders therefore develop their own       notices.       As in Nova Scotia, PEI law permits borrowers to “reinstate” the mortgage by paying all arrears and       costs outstanding before the date stated in the notice. If the mortgage is not reinstated, the lender       can sell the property by “public auction or private contract.” While the property may be listed with a       real estate agent, attempts must first be made to sell the property by auction. Notice of the auction       is usually personally served to the borrower, spouse, and any guarantors. It contains the conditions       of sale set by the lender. The same notice must be published in a newspaper in PEI, and usually       such a notice is advertised for four consecutive weeks prior to the sale. The lender normally obtains       an appraisal during this time.       The property is sold by public auction held at the courthouse with the Sheriff acting as auctioneer.       However, there is no requirement that the Sheriff acts as auctioneer; trained auctioneers can also       conduct the auction. At the auction, the bidding is opened and the notice of sale is read, as well as       the conditions of the sale imposed by the lender.       If there are no bids within the conditions imposed by the lender, the property listed privately with a       real estate agent. There are no restrictions on how long the property can be on the market.       The Real Property Act sets out how the proceeds of the sale are to be applied. The proceeds are       first used to pay the costs of the sale, followed by other expenses incurred by the lender. Any       remaining balance is to be paid toward the mortgage debt remaining.       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