Canada: Mortgage Enforcement Series Bulletin I – Notices

Last Updated: June 26 2008
Article by BLG's Commercial Real Estate Law Group

Most Read Contributor in Canada, October 2017

A. Introduction

Given the "credit crunch" and its unfortunate side effects, we thought that a series of four bulletins dealing with Ontario mortgage enforcement would be timely, particularly for our lending clients. For those of you without mortgage enforcement experience, these bulletins will serve as an introduction to mortgage enforcement. For those of you with mortgage enforcement experience, we hope these bulletins will serve as a refresher.

The first bulletin in this series deals with the issuance of demand letters and notices. The second bulletin looks at the various types of remedies available to a lender enforcing its security and some strategic planning to keep in mind. The third bulletin takes a closer look at some of the advantages and disadvantages of the power of sale and foreclosure remedies. The last bulletin in this series focuses on how a lender selling a property under the power of sale proceeding can protect itself in the agreement of purchase and sale.

When a loan goes into default, a lender must assess how it can best recover the outstanding indebtedness, including the decision whether to realize on its security. We can help you with this initial assessment. We would be pleased to work with you to create a comprehensive strategy to deal with the nuances of your particular mortgage enforcement situation, to ensure any proceeding or action goes as smoothly as possible and to ensure that there are limited surprises down the road. (Please note that these bulletins are drafted from an Ontario law perspective. We would be pleased to discuss any mortgage enforcement questions you might have for the other Canadian provinces).

B. Demand Letters

" Generally, a lender, or its solicitors, should send a written demand letter to the borrower, and any guarantors, prior to actually commencing any remedy against the borrower for default.

  • " The letter should outline the default and the requirement for payment or cure within a certain time period having respect to the terms of the loan documentation or under common law, failing which the appropriate legal proceeding may be commenced without further notice.

  • " The lender must look to the specific language of the security documents and common law to determine the minimum payment or cure period that must be provided.

  • It is important to review the security to ensure that other notice requirements are strictly complied with. For example, sending the notice by fax or email may not be sufficient!

  • A demand letter is a relatively inexpensive initial step and may have favourable, inexpensive results:

  • the default in payment may have been an oversight (e.g., new pre-authorized account, failure to provide post-dated cheques etc.).

  • the demand letter might spur the borrower to rectify the default quickly.

  • the "surprise" of skipping the demand letter (where the lender could legally do so) and going straight to a mortgage enforcement could irreparably damage the lender/borrower relationship.

  • if sufficient particulars of a non-monetary default are provided in the demand letter, the demand letter can guide the borrower on how to bring the mortgage into good standing.

  • If there are circumstances where you believe a demand letter should not be part of your mortgage enforcement strategy (e.g., the borrower is a suspected fraudster), we would encourage you to contact us immediately to discuss your proposed mortgage enforcement strategy.

C. Notices

For the sake of efficiency and cost saving purposes, the lender, or its solicitor, should also send a notice under the Bankruptcy and Insolvency Act and the Farm Debt Mediation Act, if applicable, at the same time as the final demand letter.

Bankruptcy and Insolvency Act ("BIA") Notice

  • The BIA requires a secured creditor to provide 10 clear days' prior written notice (in the prescribed form) of its intention to enforce its remedies against all or substantially all of the inventory, accounts receivable or other property of an insolvent debtor.

  • This permits an insolvent debtor to file notice of its intention to make a proposal to its creditors and stay any proceedings.

  • It may not be clear when a borrower falls under the definition of an insolvent debtor, therefore it is common practice to issue this notice as a matter of course.

Farm Debt Mediation Act Notice

  • If the property is a "farm" and the borrower is a "farmer" under the Farm Debt Mediation Act, then the lender is required to give the borrower 15 business days' prior written notice of its intent to enforce any remedy against the borrower's property or to realize on any security.

  • The notice must also advise the farmer of the farmer's rights to apply for a review of the farmer's financial affairs, mediation with creditors and a stay of any proceedings.

  • The farmer's right to apply for a review is contingent upon the farmer being currently engaged in farming for commercial purposes and being an insolvent person.

Commercial Real Estate Group

Our Commercial Real Estate Group consists of more than 50 experts across the country in all facets of commercial real estate law. We provide excellent creative legal advice to a broad spectrum of clients including developers, builders, pension funds, private financiers, lending institutions, private, public and crown corporations, national and international business communities, including aerospace and airlines, banking and finance, securities, manufacturing, construction, insurance, government agencies, natural resources, high technology, retail, transportation and real estate.

Our services include:

Acquisition and Development

Negotiation and preparation of all documentation relating to the acquisition, development, construction, financing and marketing of commercial, industrial and residential properties, including:

  • Retail plazas

  • Hotels

  • Office buildings

  • Business parks

  • Apartment buildings

  • Condominium projects

  • Mixed-use developments

  • Residential subdivisions

  • Shopping centres

Public/Private Arrangements

Negotiation of arrangements between private enterprise and governmental bodies relating to land and infrastructure development. Formulation and preparation of proposal calls for public/crown corporations and all ancillary agreements.

Construction and Infrastructure

Negotiation and preparation of construction contracts. Negotiation, structuring and financing of infrastructure projects.

Financing and Restructurings

Mortgage enforcement and preparation of all notices and court documents on behalf of lenders. Negotiation and preparation of all financing documentation on behalf of private and institutional lenders and borrowers, for project and term financing. Negotiation of arrangements between investors and developers pertaining to the restructuring of financial affairs, including attending to all due diligence matters.


Negotiation and preparation of all documentation relating to the acquisition, development, construction and financing of hotels, including advising with respect to all related issues including, hotel management agreements, licensing agreements, employment issues, co-owner arrangements, liquor licensing agreements and franchise agreements.


Performance of due diligence reviews and advising on compliance with laws and regulations, advising on obtaining required authorizations and licences and on co-ordinating environmental audits and clean-ups. Negotiation of environmental representations and warranties, advising on the management and disposal of contaminants and their transport, storage and export, and providing representation before administrative tribunals, the civil courts and in governmental inquiries related to these matters.


Advise and assist on all aspects of zoning and planning work, including securing approval of amendments to zoning, advising on expropriation and permitted land uses and the appeal of realty tax assessments. In Québec this includes representation before the Tribunal Administratif du Québec to contest municipal valuation assessments of major hotel, office, commercial and industrial properties.

Long Term Ground Lease

Negotiation and preparation of long-term ground leasing arrangements for both public and private sectors.

Commercial Leasing

Negotiation and preparation of all leasing documentation for retail centres, business parks, office buildings and warehouses.


Structuring, assistance, negotiation and preparation of all condominium documentation, including project financing documentation, declaration, by-laws and rules, disclosure statement, development agreements and sales agreements.


Negotiation and preparation of all documentation required to form real estate syndicates and partnerships, as well as co-tenancy and joint venture arrangements for developers.

Limited Partnerships

Negotiation and preparation of all required documentation and advising with respect to the entering into and the structuring of limited partnerships.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.