The short answer
How you enforce depends on where the land is, not where the lender or borrower is. Ontario lenders usually sell under a private power of sale; BC and Alberta lenders go to court; Quebec follows the Civil Code. In the US, roughly half the states require judicial foreclosure and the rest allow faster trustee's sales, but anti-deficiency rules can make the fast route costly.
Canada: four provinces, four models
Ontario — power of sale. Part III of the Mortgages Act, R.S.O. 1990, c. M.40, permits a mortgagee to sell without a court order. Notice of sale may be given once default has continued at least 15 days, and the notice period is at least 35 days (s. 32). During the notice period, section 42 generally prevents further enforcement steps. Most private mortgages extend the contractual default period, so read the charge terms.
The selling mortgagee must act in good faith and take reasonable precautions to obtain the true market value. The Court of Appeal considered those duties in Krieser v. Garber, 2020 ONCA 699. Proper appraisals, listing on the open market and a documented marketing period protect the lender from an improvident sale claim. The lender can sue on the covenant for any shortfall.
British Columbia — judicial foreclosure and court-ordered sale. BC enforcement runs through the Supreme Court under the Supreme Court Civil Rules. The court typically grants an order nisi with a redemption period, often six months for residential property, and may then order a sale with the lender given conduct. Judicial supervision adds time and cost but produces a court-approved price.
Alberta — judicial, with anti-deficiency protection. Alberta also enforces through the courts. Section 40 of the Law of Property Act, R.S.A. 2000, c. L-7, generally limits a lender to the land where the borrower is an individual, subject to exceptions (including for corporate borrowers). Guarantees and corporate borrowers matter more in Alberta than anywhere else in Canada.
Quebec — hypothecary recourses. The Civil Code of Québec requires a prior notice of the exercise of a hypothecary right (art. 2757), with a 60-day period for immovable property. The creditor may then take possession for administration, take the property in payment, sell it itself, or seek a sale under judicial authority. Taking in payment may need court authorization where the debtor has repaid half or more of the obligation.
United States: judicial and non-judicial states
| State | Method | Typical timeline | Deficiency position | Key authority |
|---|---|---|---|---|
| Florida | Judicial | Months to over a year if contested | Available; action must be brought within one year after sale | Fla. Stat. ch. 702; § 95.11(5)(h) |
| New York | Judicial | Often among the longest in the US | Motion within 90 days of sale; election of remedies applies | RPAPL §§ 1301, 1371 |
| California | Usually non-judicial trustee's sale | About four months minimum | None after a trustee's sale; one-action rule | Civ. Code § 2924 et seq.; CCP §§ 580d, 726 |
| Texas | Non-judicial | Fast: sale on first Tuesday of the month after 21 days' notice | Available, with fair-market-value offset | Tex. Prop. Code §§ 51.002, 51.003 |
| Washington | Usually non-judicial | About four months minimum | Generally barred after trustee's sale, with commercial exceptions | RCW 61.24 (including § 61.24.100) |
Timelines are indicative only and depend on the court, the borrower's response and any bankruptcy filing.
The California trade-off. A trustee's sale under a deed of trust is fast, but Code of Civil Procedure § 580d bars a deficiency judgment afterwards. Section 726, the "one-action rule", also requires the lender to proceed against the security before suing on the debt. Lenders who expect a shortfall may choose judicial foreclosure or rely on guarantees structured with California counsel.
The New York trap. RPAPL § 1301 generally prevents a lender from suing on the note while foreclosing without court leave. Pick the remedy deliberately.
When the borrower files for insolvency
Insolvency freezes enforcement on both sides. In Canada, a bankruptcy or proposal triggers the stay in section 69 of the Bankruptcy and Insolvency Act, and a Companies' Creditors Arrangement Act initial order imposes a court-ordered stay. Secured creditors can often seek to lift the stay or ask for a receiver under BIA section 243.
In the US, a bankruptcy petition triggers the automatic stay in 11 U.S.C. § 362. Cross-border cases are coordinated through Chapter 15 of the US Bankruptcy Code (11 U.S.C. § 1501 et seq.) and Part IV of the CCAA, which let a court in one country recognize the other's main proceeding.
Planning enforcement at origination
- Choose the security instrument the local law favors (charge, mortgage, deed of trust, hypothec)
- Take guarantees where anti-deficiency rules apply (Alberta, California, Washington)
- Include an assignment of rents and a receiver clause
- Budget for the realistic timeline in judicial jurisdictions
- Engage local enforcement counsel before the first default
Frequently asked questions
Frequently asked questions
What is the difference between power of sale and foreclosure?
Power of sale lets the lender sell the property to recover the debt, often without court. Foreclosure transfers title to the lender or ends the borrower's redemption right, usually through court.
How long does an Ontario power of sale take?
At least 15 days of default plus a 35-day notice period before sale steps, then the marketing and closing period. Contract terms can extend these.
Can I get a deficiency judgment after a California trustee's sale?
No. Code of Civil Procedure § 580d bars it, so lenders anticipating a shortfall consider judicial foreclosure or guarantees.
Which US states are fastest for foreclosure?
Non-judicial states such as Texas are generally fastest; judicial states such as New York and Florida take longer.
This content is general information for industry professionals and is not legal, tax or financial advice. Laws change and apply differently to each transaction; obtain advice from qualified counsel in each relevant jurisdiction. Legal counsel to the Cross-Border Private Lenders Association: Jasmine Daya & Co. Questions: info@cbpla.com