Land 2 - Mortgage enforcement

Question 1

What remedies are there for a lender?

Answer 1

1. Debt Action
2. Appoint a Receiver
3. Foreclosure
4. Possession
5. Right to Sell

Question 2

What can’t be done WITHOUT a court order for an equitable mortgage?

Answer 2

• Possession
• Right to Sell

Question 3

What limitations are there on lenders on the right to possess?

Answer 3

1. Criminal offence to use/threaten violence to gain entry (makes possession by self-help risky)
2. Follow process for residential property
3. Common Law Jurisdiction to Postpone (see notes)
4. Statutory Jurisdiction to Postpone

Question 4

What is required for the lender’s right to sell to exist?

Answer 4

(a) There’s an express power of sale (in mortgage documents)
(b) Implied power under statute unless excluded/modified

Question 5

When does the lender’s right to sell arise?

Answer 5

As soon as one payment becomes due

Question 6

When is a lender’s right to sell exercisable?

Answer 6

When one of the following applies:
- Notice requiring payment served & borrower defaults
- Interest unpaid for at least 2 months
- Some breach of another mortgage provision

Question 7

What duties does a lender owe when exercising a right to sell?

Answer 7

(a) reasonable care to obtain proper price for property
(b) Perfection as to price isn’t necessary
(c) Must get expert advice on method of sale, marketing strategy and reserve price
(d) Lender has unfettered discretion as to when to sell