If your mortgage is in arrears and letters from your lender have started arriving, it is natural to feel like the house is already gone. It is not. In Newfoundland and Labrador, a lender has to follow a set process before it can sell your home, and that process gives you time to act. This guide explains how it works in St. John’s and what your options are at each stage.
Nothing here replaces advice from a lawyer who has read your mortgage. If a notice has already arrived, book time with a Newfoundland and Labrador lawyer as soon as you can.
How mortgage enforcement works in NL
Most people call it foreclosure, but in this province a lender usually enforces a mortgage through a power of sale under the Conveyancing Act. The rules are more detailed than many people expect, and several of them protect you.
The 30-day notice
Before a lender can use its power of sale, it must give you written notice. Other registered encumbrancers, like a second lender, and any guarantor must also be notified. The default has to continue for 30 days after that notice before the lender can move ahead, whether the problem is missed principal, unpaid interest or another breach of the mortgage.
Advertising the sale
Only after that 30-day period ends can the lender publish a notice of sale. It must appear in a local newspaper at least once a week for two consecutive weeks before the sale.
An appraisal is required
Before the sale date, the lender must get a written appraisal from a qualified appraiser.
The 75% rule
If the lender wants to sell for less than 75% of the appraised value, whether by auction, tender or private sale, it needs a judge’s approval after notice to the people with an interest in the property.
Accounting and the shortfall
Within 30 days after the sale, the lender must send you an accounting along with a copy of the appraisal. If the sale does not cover what you owe, the lender may try to collect the difference. However, if the lender did not follow the required steps, you are not liable for a deficiency.
What about being forced to leave?
The power of sale is about selling the property. If the owner is still living there and will not leave, the lender can apply to the Supreme Court of Newfoundland and Labrador for an order of possession. You will be served with that application, and ignoring it is the worst thing you can do. Respond, get legal help, and use the time to plan.
Keep every document
Put every letter, notice and envelope from your lender or its lawyer in one folder, and write down the date each one arrived. The 30-day period and the advertising dates all run from specific events, and a lawyer will need those dates to tell you how much time you really have and whether the lender has followed the rules.
Your options while the clock runs
- Catch up. If you can pay the arrears and costs during the notice period, ask the lender whether that will bring the mortgage back into good standing.
- Negotiate. A repayment plan, a deferral or a modified mortgage may be possible, especially if your hardship is temporary.
- Refinance. Another lender, sometimes a private one, may pay out the current mortgage. Watch the interest rate and fees closely.
- Sell the house yourself. Paying out the mortgage with your own sale ends the enforcement and keeps any remaining equity with you.
Selling a home in St. John’s under pressure
St. John’s is the province’s capital and largest city, home to about 110,000 people, with more than 212,000 in the metro area at the 2021 census. Its economy rests on government, the offshore oil and gas industry centred on projects like Hibernia, Terra Nova, White Rose and Hebron, and tourism. The brightly painted row houses downtown are among the most recognizable homes in Canada, and much of the old downtown was rebuilt after the Great Fire of 1892.
St. John’s is also the foggiest and windiest major city in Canada, with heavy winter precipitation, and that weather is hard on exteriors. If your house needs a roof, windows, fresh paint on the siding or work on a damp basement, fixing those things before listing is rarely possible when you are already behind on payments.
Timing is the other problem. Once a notice of sale is published, you have a matter of weeks. A listing that relies on showings, a buyer’s mortgage approval and a home inspection may not close in time.
How a cash sale fits
A direct sale for cash takes the uncertainty out. There is no appraisal for a buyer’s bank, no inspection condition and no financing to wait on. We agree on a price, you set a closing date that comes before the lender’s sale, and the mortgage is paid from the sale money on closing day. If title is clear, closing can take as little as a couple of weeks.
It will not always match the price of a fully renovated house on the open market. But compared with a lender-driven sale, a deficiency claim and enforcement costs, many owners find it leaves them in a much better position.
Sell your St. John’s house to East Coast Home Buyers
We buy houses in St. John’s and across the northeast Avalon as-is, including homes where the mortgage is in arrears. We will give you a clear number and work to a closing date that beats your lender’s timeline. Learn more on our St. John’s cash home buyer page.
If you have received a notice, ask for a cash offer today so you have a real option on the table.
Frequently asked questions
How long does a lender in NL have to wait before selling my house?
Under the Conveyancing Act, the lender must give written notice and the default must continue for 30 days. After that, the notice of sale must be published in a local newspaper at least once a week for two consecutive weeks before the sale.
Can my lender sell my house for far less than it is worth?
A sale for less than 75% of the appraised value requires a judge’s approval. The lender also has to get a written appraisal before the sale.
Will I owe money after a power of sale?
Possibly, if the sale does not cover the debt. But if the lender did not follow the Act’s required steps, you are not liable for the shortfall. A lawyer can review what happened.
Can I sell my house myself after getting a notice?
Yes. Until the lender’s sale happens, you can sell and pay out the mortgage, which ends the enforcement. You will need a buyer who can close quickly.