Default

Most people who buy a home need to borrow money from a bank or other financial institution to help cover the purchase price of the home. Usually the loan is secured by a mortgage on the property.  If you default on your mortgage your lender may take legal steps to foreclose on your property.

Default means you have broken the mortgage terms. The most common default is not making mortgage payments when they are due.

Failure to make mortgage payments is not the only form of default. Mortgages have many promises the borrower must follow. Breaking any of these promises can be a default. Some mortgages even allow the lender to demand repayment of the mortgage in full and subsequently foreclose at any time at their discretion without default.

Most mortgages have an ‘acceleration clause’, which usually says that if you miss a payment the entire amount owing on the mortgage is payable right away.

Can the lender take my house if I miss payments?

The lender can start the foreclosure process if you default on your mortgage. Default means you break any of the terms of your mortgage, including falling behind on mortgage payments.

When you arrange a mortgage, it is a contract between you and the lender, where you agree to pay back the principal and interest according to a set schedule. You are the legal owner of the house, but the lender will record the mortgage with the Land Registry, to protect their interests. The house is security for the loan. If you do not make payments as scheduled, the lender has the legal right to force a sale of the house. 

Lenders usually do not want foreclose, and will make reasonable efforts to get you back on track so you can keep your home, including refinancing or setting up a payment plan. Talk to your lender right away if you are having trouble making your mortgage payments. Do not wait until legal proceedings have started against you.

Demand Letter

Demand letter: Before taking legal action the lender or their lawyer will usually send you a demand letter.  By the time a Demand Letter is sent the lender has usually already hired a lawyer, which will increase the amount of money the lender is looking for to bring the mortgage up to date.

A demand letter:

• tells you why you are in default (for example, you have missed payments)
• tells you the amount you owe. This usually includes arrears and legal costs
• gives you a deadline (often 10 days) for making the payment
• says it is your last chance to pay before the lender takes legal action.

If you get a demand letter:

• Call the lender or their lawyer right away. Try to negotiate with the lender or their lawyer to get your mortgage back on track if possible
• Ask whether you can refinance, to lower your mortgage payments and pay them over a longer period
• Try speaking with a new lender to see if you can get a new mortgage to pay off the original mortgage
• Get help from a credit counsellor or licensed insolvency trustee
• Consider putting your property up for sale.

Notice of Action and Statement of Claim

This is formal notice that the lender is foreclosing, and that they have started the court process.

Notice of Action and Statement of Claim: If you do not respond to a demand letter before the deadline in the letter, or cannot negotiate an agreement with the lender, the lender, may start the foreclosure process.

The lender starts foreclosure by having a legal document called a Notice of Action and a Statement of Claim filed with the Supreme Court of Nova Scotia and delivered to you. They are required to deliver this notice to you in person (‘personal service’). It is not something they may drop off in your mail box or courier to you, unless the lender has applied to the court to get permission to have you served (notified) in an alternative way, called substituted service. However, a court generally only grants substituted service if the lender proves to the court that they have tried all reasonable ways to serve the borrower in person.

It is not a good idea to evade personal service as this will increase the lender’s legal costs, and so will increase the amount the lender is looking for when foreclosure is complete.

A Notice of Action is a court document that tells you that the lender is starting a legal process against you because you broke the terms of your loan or mortgage. It tells you the basics of who is involved in the foreclosure process, and how long you have to file a defence.

A Statement of Claim is a court document attached to the Notice of Action. The Statement of Claim outlines the details of what the lender is claiming against you in court. It may include the following:

1) The date of the mortgage
2) Details of the registration of the mortgage at the Registry of Deeds or Land Registration office
3) The property involved
4) Details of the default (for example, you defaulted because you did not make a payment or broke some other term of the mortgage)
5) Details of any agreement(s) that might have changed your mortgage
6) The total amount outstanding on the mortgage or amount unpaid. This will usually include the principal balance, interest, property taxes, legal fees and out-of-pocket expenses of the lender, generally known as “protective disbursements”
7) A statement asking for foreclosure and sale of the property (‘Order for Foreclosure, Sale and Possession’) if the total amount of the mortgage, interest and costs are not paid
8) A statement asking for a deficiency judgment to cover the balance of the loan if the property is sold for less than what is owed to the mortgage lender.

The Notice of Action and Statement of Claim forms come from Nova Scotia’s Civil Procedure Rules. The rules are available online at courts.ns.ca

Options if you get a Notice of Action and Statement of Claim

Once you are served the Notice of Action and Statement of Claim you may:

• pay the money (which usually means paying the entire principal, interest and costs - including legal costs); or
• file a defence to the claim within the required time; or
• apply to court, within the required time, to ask to have the foreclosure process discontinued. You would need to pay up all the arrears and legal costs. The right to have the foreclosure discontinued is only available once during the life of your mortgage.

Filing a defence

The form and general instructions for filing a defence are on the Nova Scotia Courts website under How to Defend an Action on the Supreme Court-Court Forms page. Try to get legal advice if you want to file a defence. Contact a lawyer in private practice, or there is a Free Legal Clinic in Sydney and Halifax, for people who are going to Supreme Court without a lawyer.

If you want to file a defence, you must file it within the required time.

If you disagree with what is in the Notice of Action & Statement of Claim, you should file a defence with the Supreme Court of Nova Scotia within the following time:

• 15 business days if you are served in Nova Scotia
• 30 business days if you are served outside of Nova Scotia but within Canada; and
• 45 business days if you are served outside of Canada.

The days are business days, so weekends and weekdays when the court is closed are not included. The 15 day timeline applies to most circumstances, so do not miss the deadline.

If you choose to file a defence, it should include why you feel your property should not be foreclosed on.

Some examples of defences may include:

1) That the mortgage was not signed
2) You never received money from the lender
3) You repaid the lender
4) You have not broken any mortgage terms and you are not in default.

You must file your defence with the Supreme Court of Nova Scotia and serve the lender or their lawyer personally with a copy of your defence. The court will then give you a court date for you to dispute the lender’s claim to a foreclosure.

If you do not file a defence

If you do not either file a defence or apply to court for other relief, such as applying to court to have the foreclosure discontinued, the lender will apply to a judge for an Order for Foreclosure, Sale and Possession of the property. This court application is called a motion, and is usually ‘ex parte’, which means without notice to you. The idea is that you were already notified of the court process when you got the Notice of Action and Statement of Claim and chose not to participate by not filing a defence.

At the hearing for the Order for Foreclosure, the judge can:

• Ask for more information or better proof of the mortgage debt
• Order that others be there before the judge hears the case
• Direct the sale of the property, making an order of foreclosure and sale
• Make an order stating what should happen concerning the payment of the money owed.

Can foreclosure be stopped?

Maybe. Some possibilities are: negotiating; redeeming the mortgage; reinstating the mortgage; filing a successful defence.

Negotiate: The easiest way is to negotiate with the lender. If you have missed payments, contact the lender and talk about your situation. The lender may be willing to give you time to catch up with payments. You may be able to refinance, so that you have lower mortgage payments over a longer term. Never ignore the lender’s letters or inquiries.

Redeem: You may “redeem” the mortgage by paying the full amount owing on the mortgage, including the interest, principal and any penalties or costs, before the sale of your property at public auction. This way you keep the equity built up in your home.

This may mean:

• getting a new mortgage from a different lender in order to pay out the first mortgage. This can be difficult. Sometimes a mortgage broker can help. The Financial Consumer Agency of Canada has general information about mortgages that you might find useful; or
• selling your property before the auction for more than what is owed to the lender.
  

Apply to Supreme Court to discontinue the foreclosure (‘reinstate’ your mortgage): This option can only be used once during the life of a mortgage. You can apply to court to have a foreclosure action discontinued (have the mortgage ‘reinstated’). This is a right under a provincial law called the Judicature Act. If the default is non-payment of the mortgage, you will have to pay all the arrears and the lender’s legal costs (legal fees and out-of-pocket expenses). If the default is a breach of a covenant (promise), you will have to perform the promise, and pay the lender’s legal costs. You can apply to court to discontinue the foreclosure even if the lender is refusing to accept payments. However, you can only apply to court to discontinue the foreclosure before the lender has made the motion and obtained a court order for foreclosure and sale (see ‘If I do not file a defence’).

Defend the action: if you file a successful defence, the foreclosure process may be stopped.

Will bankruptcy stop foreclosure?

No, the lender can still foreclose if you are in default of the mortgage terms. However, it may help you to declare bankruptcy on other debts so that you may concentrate your finances on paying the mortgage, and may deal with a deficiency claim if the property is sold at public auction and there is a shortfall. You should talk to a licensed insolvency trustee about your financial situation and the options open to you. Go to the bankruptcy page for more information, or contact the federal Superintendent of Bankuptcy.

Can I still sell my house?

Yes, you may try to sell the house or property up until a foreclosure order has been issued by the court.

Can the lender refuse payments once a court process starts?

Nova Scotia’s Judicature Act gives you the right to discontinue the foreclosure process by paying all outstanding arrears and costs owed to the lender or performing the covenant (promise) that is being broken. This is also called reinstating the mortgage. You can do this even if the lender is refusing to accept payments. This can be done up until an Order for Foreclosure, Sale and Possession has been issued (made) by the court. This right is only available once per mortgage. You must apply to the Supreme Court of Nova Scotia. You should get legal advice from a lawyer if you can, to get help with your application. Contact a lawyer in private practice, or there is a Free Legal Clinic in Sydney and Halifax, for people who are going to Supreme Court without a lawyer.

The court has no power to discontinue on payment of arrears and legal costs if there is a second foreclosure proceeding under the same mortgage (i.e. where you reinstated the mortgage and default again, and the lender starts foreclosure proceedings for the new default). If the mortgage has been reinstated once before, the only way to stop the new process is through agreement with the lender or by paying the entire amount of the mortgage, plus interests, costs and out-of-pocket expenses.

Who are the plaintiffs and defendants in a foreclosure

Plaintiff: this is the lender who started the foreclosure process. Their lawyer will be at the court hearing on the lender’s behalf.

Defendants may include:

• You, and any other borrowers on the mortgage
• Guarantor, if someone acted as a guarantor for the mortgage
• Trustee in Bankruptcy, if the borrower is bankrupt, or was bankrupt during the mortgage
• Owner of the property (any new owner).

If no defence is filed, usually only the plaintiff’s lawyer will be at the foreclosure court hearing.

Sale of the Property

If the lender is successful on their motion and got an Order for Foreclosure, Sale and Possession, the lender will arrange for sale of the home, usually through public auction by the Sheriff.

Public Auction:

After the court grants an Order for Foresclosure, Sale and Possession, there will be a Sheriff’s sale by public auction. The auction is done by the Sheriff, or by any other person given that power by the court. Recently, the court in Nova Scotia has allowed the sale to be done by an experienced foreclosure lawyer in order to reduce fees associated with the Sheriff.

The property will be sold at a public auction in the county where the property is located.

The plaintiff (lender or their lawyer) must:

• advertise the sale of the property in a local newspaper in the area where the property is located. There must be at least two advertisements in a local newspaper, the first at least 15 days before the sale, and the second within 7 days of the sale;
• at least 15 days before the sale, notify the property owner(s) and the borrower(s), if they are not the same person, of the date, time and place of the sale. Notice to the borrower can be sent by regular mail.

The notice will contain the time and place of the auction.

Private Sale:

Although unusual, if the lender has an offer to purchase the property from a third party and all subsequent encumbrancers agree with the sale, the lender may apply to the court for approval to sell the property privately. However, in most cases the property will be sold at a public auction.

Can the lender buy the property on foreclosure

Yes, the property is sold to the highest bidder at a public auction.

Public Auction process

The Sheriff, or person appointed by the court, will hold the public auction at the time and place in the notice. If you wish to bid, you must go personally or send someone to bid on your behalf.

The successful bidder will have to pay 10% of the sale price at the end of the auction and then has 15 days to pay the rest If you are the successful bidder, and you have not paid the rest within the 15 days, you will lose the 10% deposit, as it will be applied against the amount owing to the lender. You cannot recover this money.

The rules requiring 10% down payment at the auction are firm. If you are the highest bidder and do not have the full 10% in guaranteed form (cash, certified cheque or solicitor’s trust cheque) with you at the auction, your bid may be unsuccessful and the property will go to the next highest bidder. The Sheriff has the discretion to allow the highest bidder a short amount of time to get the funds but is not required to do so and may refuse. Even if the Sheriff provides you with a short time to get the funds, in practice it is as little as 20 minutes. Therefore, if you want to be the successful bidder, you should ensure you have the 10% available at the auction.

If the lender is the successful bidder they may still ask for a Deficiency Judgment.

Deficiency Judgment explained

Deficiency: Following the sale, a lender may apply to the court for a Deficiency Judgment, which is a request by the plaintiff to get a judgment against the borrower for the shortfall amount; that is, the difference between the amount owing on the mortgage (plus interest, costs, out-of-pocket expenses, Sheriff fees, property taxes), and the amount received from the sale of the property.

The lender must show that the amount obtained from the sale of the property is a fair market price. This is determined either by actual sale or though an appraisal.

The borrower and anyone else who may have to pay the deficiency amount will get at least 10 days’ notice of the deficiency hearing. The plaintiff has 6 months to apply for a Deficiency Judgment, from the date of the Sheriff’s sale.

What if the sale price is more than the amount owing

Surplus: If the sale of the property brings in more money than the amount of Sheriff’s fees and outstanding taxes and the amount owed to the plaintiff, the surplus is given to the Accountant General of the Supreme Court. It will be distributed among those who have filed claims against the property and those who are owed money by the borrower (known as subsequent encumbrancers). They can apply to the court to be paid and are paid according to priority. Before these people are paid the Sheriff must pay any outstanding property taxes from this surplus. If there is still a surplus, any party involved with the foreclosure, including the borrower, may apply to the court or judge to receive the surplus. Before applying however, each party must file an affidavit (sworn document) to prove they are entitled to a claim. The court or judge may then order the distribution of the surplus to the parties by priority.

You should try to get legal advice if you wish to make a claim for surplus.

Can the sale be overturned

The court has the power to overturn the sale in exceptional cases. An example would be if the directions in the foreclosure order were not followed.

What happens once the property is sold

Once the property is sold and the amount due has been paid to the lender , the Sheriff files a report with the court as soon as possible. This report states that the property has been sold, the name of the successful bidder, the purchase price, how the money was distributed and that the Sheriff has delivered the deed to the property to the successful bidder.

What happens once the Sheriff's report is received by the court

Once the report is filed, the lender will apply for an Order Confirming Sale. This order states that the sale has taken place and that the foreclosure is complete. The lender must also file: 1) The sheriff’s report and 2) An affidavit (usually prepared by the plaintiff’s lawyer) stating that the advertisement was done and notices were sent to all those who had interest in the property.

How soon do I have to leave the property

You should be ready to move out on the date of the public auction.

If you are a homeowner, you must leave the property once the successful bidder completes the purchase, unless the new owner says otherwise.

The Order for Foreclosure, Sale and Possession usually gives the lender the ability to ask the Sheriff to deliver possession of the property. This means the lender may require that you leave as soon as the Order for Foreclosure, Sale and Possession has been issued (made).

However, lenders generally don’t request vacant possession (require that you leave) until the date of the sale at public auction. When a lender sends the notice of sale under public auction to the homeowner, they usually advise that the homeowner must vacate (leave) the premises on or before the date of the sale at public auction.

Once the property has been sold on the date of the public auction, you may ask the new owner for permission to stay in the property. However, they have no obligation to let you stay and therefore you should be prepared to move out on the date of the public auction.

If you are a tenant, how soon you move out depends on the type of tenant you are. If you are a residential tenant (for example, renting an apartment) you must be given notice according to the the Residential Tenancies Act (the earlier of 3 months or the expiry of the lease under any written lease agreement – such as a fixed term lease). Contact Residential Tenancies at 902-424-5200 or 1-800-670-4357, or online at gov.ns.ca/snsmr/access/land/residential-tenancies.asp for more information. If you are a commercial tenant (a place rented for business) you must move out the day of the foreclosure sale, unless the new owner tells you otherwise.

The successful bidder becomes owner of the property once the full purchase price has been paid and the Sheriff gives him or her the deed. The foreclosure is complete once the Confirmatory Order is granted.

How long foreclosure takes

If no defence is filed and the lender goes through the normal steps, foreclosure takes 2 to 3 months from the filing of the Notice of Action and Statement of Claim to the concluded sale. It may take longer, depending on the court schedule.

The 2 to 3 months consists of:

1. The 15 days to file a defence after being served the Notice of Action (longer than 15 days if you are served outside of Nova Scotia, as set out above).
2. If no defence is filed, the lender can schedule the Motion to court for Order for Foreclosure, Sale and Possession, with 2 days’ notice.
3. The 15 days’ notice required between the Order for Foreclosure, Sale and Possession and advertisement for the sale at public auction.
4. The 15 day time limit for the successful bidder at the auction to pay the full purchase price.

The days are business days, so weekends and weekdays when the court is closed are not included. The rest of the time involved will depend on how quickly the lender decides to proceed, and the availability of a judge to hear the case and grant the orders.

If a defence is filed, the above timeline can vary a lot. The lender may make a motion to court for summary judgment, and how long things will take will depend on the success of the defence, as well as the court schedule.

More help and information

For help and information:

• Your lender: read your mortgage document carefully, and talk with your lender about options you may have if you are having financial problems
  
  
• A lawyer: It is best to try to talk with a lawyer if you are unsure about what to do.
  
  Nova Scotia Legal Aid does not generally deal with foreclosures, although you should contact them directly to see if they can help in your situation - go to nslegalaid.ca, or look under 'Legal Aid' or 'Nova Scotia Legal Aid' in the telephone book.
  
  Otherwise, you would need to speak with a lawyer in private practice. The Legal Information Society offers a Legal Information Line and Lawyer Referral Service if you need help finding a lawyer. Through this service you can get free legal information, and you may be referred to a lawyer who will meet with you for up to 30 min for a fee of $20 + tax, after which regular fees would generally be charged. The number is 902-455-3135 in the Halifax Regional Municipality, or toll free at 1-800-665-9779. 
  
  There is also a Free Legal Clinic in Sydney and Halifax, for people who are going to Supreme Court without a lawyer.
  
  
• More information about the foreclosure process:
  
  • Nova Scotia’s Civil Procedure Rules (court rules & forms that apply in the Supreme Court of Nova Scotia);
  • Supreme Court of Nova Scotia, Practice Memorandum - Foreclosure Procedures;
  • Nova Scotia's Judicature Act
    
• A trustee in bankruptcy, also called a Licensed Insolvency Trustee can provide professional advice about your options for dealing with debt.  Trustees are listed in the Yellow Pages  under 'Bankruptcies', or search for 'trustee in bankruptcy' online.  You can also get a listing of local trustees from the Office of the Superintendent of Bankruptcy at 1 877 376-9902 (toll free) or osb.ic.gc.ca
  
  
• Office of the Superintendent of Bankruptcy - regulates bankruptcies, oversees and licenses trustees in bankruptcy (licensed insolvency trustees), and has helpful general information for debtors and creditors
  Website  www.osb.ic.gc.ca
  Industry Canada
  Phone: 1 877 376-9902 (toll free)

• A credit counselling agency.  Credit counsellors cannot administer bankruptcies or consumer proposals, but can help you in a number of ways, such as a debt management plan, budgeting, wise credit use, and general money management. The Financial Consumer Agency of Canada  - has information about how to find a reputable Credit Counselling service: www.fcac-acfc.gc.ca.
  
  
• Debtor Assistance Program, offered through Service Nova Scotia. Provides free help with managing your money, dealing with creditors, and consumer proposals, but cannot adminster bankruptcies (you need a licensed trustee for a bankruptcy).  Contact the Debtor Assistance Program at 1 800 670-4357 or 902-424-5200, or online at gov.ns.ca/snsmr/access/individuals/debtor-assistance.asp
  

• Financial Consumer Agency of Canada, or call 1 866 461-3222.  Lots of consumer information on many money related topics.

Is all the land in the province owned by someone or is some of the land public land?

The Province owns about 35% of the land in Nova Scotia, and the rest of the land (about 65%) is owned privately, or by the federal and municipal governments. The majority of the publicly owned land is managed by the Department of Natural Resources. This land is often referred to as Crown lands.

Can people buy Crown lands or other provincial lands?

The Province has been working to buy more land, and does not sell a great deal of the land it owns because the percentage of public land ownership in Nova Scotia is small compared to the rest of Canada. From time to time, the government does sell land if the purpose is for economic development or to assist a municipality or community – people can apply to buy land through the Department of Natural Resources.

What if it seems like no one owns a piece of land – can someone buy or use the land?

Most of the land in the province is listed in the name of an owner. Some lands are listed in the land records as “owner unknown”. This happens when the municipality cannot identify who the owner is. “Owner unknown” lands can be sold for unpaid taxes.

What is title to land?

“Title to land” means ownership of the land. A person who has “title to land” has satisfied the legal requirements to own the land and can exercise the rights of land ownership, including the right to:

• use and occupy land; and
• to include or exclude others from using the land.

“Title to land” can also refer to a legal document such as a deed, which proves ownership.

What rights and obligations go with having title to land?

A person who has title to land can exercise all the rights landowners enjoy. These rights include any lawful use such as:

• building on the land
• developing the land
• selling the land
• leasing or mortgaging the land, and
• giving the land to someone by transferring ownership.

These rights are subject to restrictions imposed by laws such as municipal land-use bylaws.

Courts will enforce those rights and make sure that others, including governments, respect them.

Where a person does not have title to a specific piece of land, they may be denied the opportunity to exercise these rights.

Having title to land means that the landowner must comply with the legal obligations of land ownership. These obligations will vary depending on where that land is located. In Nova Scotia, the main legal responsibilities of landowners include paying municipal property taxes and following land use bylaws. If you don’t pay taxes and follow applicable laws, the consequences can be severe – you may need to pay a fine or you could lose title to your land.

What does it mean to have clear title to land?

Clear title to land means there is legal certainty about who owns the land. In many cases, it is easy to identify the legal owner of a piece of land; however, sometimes several different people claim to own the same piece of a property. For example, two siblings may both claim to own the same parcel of land. If you have clear title, there are no claims on the land from others.

Why is having clear title to land important?

Clear title to land is important because it provides landowners with legal certainty that they can enjoy the rights and obligations of land ownership. Clear title to land enables landowners to develop, sell, lease, mortgage and transfer their land within the bounds of the laws where that land is located.

If I do not have clear title, what are the consequences?

Without clear title to land, the landowner’s rights may be limited or restricted by other people’s claims to the same land. This could stop the landowner from developing or selling their land. Also, it could result in family conflicts about the current and future uses of the land. For example:

• A person who wants to build a home may be stopped from doing so by another person who claims to have an interest in the same piece of land. As a result, until the dispute is resolved, the land cannot be used or developed fully.
• A person who wants to sell their land may not be able to do so if they do not have clear title.
• If it is not clear who owns the land, occupiers of the land may not know they should pay the property taxes, or may decide not to, and the land could be sold by the municipality for unpaid separate homes built on a single piece of land that has not been legally subdivided. It may not be clear who must pay the taxes.

How do I get clear title to land?

A person can get clear title to a parcel of land in several different ways – the three mentioned below are the most common ways.

• Marketable Titles Act – A person can ask a lawyer to search for evidence that will establish proof of title, such as a valid property deed, agreement of purchase or sale, or a will. One of these documents, when combined with proof that the property has been occupied for at least 20 years (if private land, or 40 years if Crown land) will generally provide enough proof for the lawyer to provide a certificate of title.
• Quieting Titles Act – A person who cannot find paper evidence of 20 years of ownership of the land (for example, a deed may be missing) can ask the court to establish their title to the land. The property owner must give evidence to the court to prove their use and occupation of the land, and if the information is good enough, the court can grant a certificate of title. When more than one person is claiming the same parcel of land, the court can consider each claim and decide who has the best claim of ownership, or if the land should be divided between the claimants.
• Land Titles Clarification Act – In 13 areas of Nova Scotia, including Cherry Brook, North Preston and East Preston, a person can apply to the provincial Department of Natural Resources for a certificate of title to their land. Help of a lawyer will be needed to complete this process. The claimant must provide a description of the property, evidence and the names of other persons who may have an interest in the property. For more information on this process, go to the Department of Natural Resources website: novascotia.ca/natr/titles-clarification/

What if someone claims to have a right to cross your land?

A claim of a right of way or an easement (easements allow one neighbour to cross over the property of a neighbouring landowner) over a parcel of land will not challenge the owner’s title to the land, but those interests can impact the legal owner’s ability to fully enjoy the rights that go with having title to land. For example, a person who has a right of way may have the right to use your driveway to access their property.

What are squatters’ rights and how do they impact title to land?

Squatters’ rights are rights of land ownership that are gained through use and occupation of land that is legally owned by someone else. These rights eliminate the ownership of the person who has legal title to the land. Another name for squatters’ rights is adverse possession.

To claim adverse possession of someone’s land, a person must show that:

• they (or other people before them) have continuously occupied and used the land for at least 20 years,
• their use of the land has been publicly known, and
• their use of the land has excluded other people from using the land.

Squatters’ rights can also be claimed against the Crown (government) but the squatter must show 40 years of continuous use and occupation.

How do I claim adverse possession of land (or squatters’ rights)?

If a person has enough evidence to establish that they have used and occupied privately owned land for more than 20 years, they can ask a lawyer to register their ownership interest in the land under the Land Registration Act.

If the person is making a claim against the Crown and has good evidence of 40 years of use and occupation of Crown lands, they can apply to the Department of Natural Resources for a certificate of release. If the department is satisfied that the evidence proves that the Crown’s ownership right has been wiped out, the certificate of release is issued to let everyone know that the Crown no longer owns the land. The person then must get a lawyer to register their ownership interest in the land. Ownership claims can also be proven in court using the Quieting Titles Act.

What is land registration?

Land registration is a process that gives landowners a way to be certain that they have clear title to their land. Once land is registered in the system, the landowner has priority over all other persons who may claim an ownership interest in the same land.

Why is land registration important?

Land registration is important because it provides certainty. It ensures that the registered landowner has all the rights of ownership including developing, selling or transferring land. It makes it easier for landowners to avoid conflicts regarding the title to their land so that the land can be used as the owner wishes.

How do I register my land?

If you want to register your land, you will need the help of a lawyer who is certified to register land titles. Certain transactions, including the sale or mortgage of previously unregistered land, automatically require the land to be registered, but a landowner also may voluntarily register their land.

Once I register my land, can someone else use it or take it away?

In certain situations – especially those involving fraud or prescriptive easements – land title registration may not provide absolute protection for registered titleholders against competing claims, but land title registration provides the maximum legal protection possible against competing claims.

Once I register my land, can the government take it away?

Provincial and municipal governments and public utilities such as Nova Scotia Power and the Halifax Water Commission can take (expropriate) private land, but only if it is for a public purpose. Usually, this would be to build roads, or to expand or improve public services. If your land is needed for a public purpose, the government must compensate you by paying you the market value of the land.

Department of Natural Resources: Land Titles Clarification

Visit novascotia.ca/natr/titles-clarification/ , or contact the Department of Natural Resources, Land Services Branch for information about:

• applying to get clear title to land under the Land Titles Clarification Act
• adverse possession (squatter's rights)
• Crown Land

Nova Scotia Land Registry

Visit www.novascotia.ca/sns/access/land/land-registry.asp for information about Land Registration

Landlords can only evict with proper notice and a good reason

 All tenants get security of tenure immediately

Security of tenure means that a landlord cannot end a tenant’s lease without a good reason.  

All tenants get security of tenure right away.  This means:

• tenants have the right to stay until they give the landlord proper notice that they are moving out, except for a fixed-term lease, which ends on the date specified in the lease; and
• a landlord can still give a tenant notice that they must move out, but must have a valid reason for doing so.

Examples of reasons for a landlord to give notice under the Residential Tenancies Act are that the landlord claims the tenant:

• is at least 15 days behind on rent in a yearly, monthly or fixed-term lease, or 30 days behind for a land-lease community
• was disruptive to other tenants, interfering with their ability to live in their unit ("bad behaviour")
• damaged the premises
• sublet or assigned the premises without the landlord’s consent
• broke the lease terms or responsibilities under the RTA
• is a safety risk to the landlord or other tenants.

If rent money is late

 Notice to quit process for unpaid rent

A landlord can give a 15 day notice to quit if the tenant is 15 days late in paying the rent.  This applies to a yearly, monthly, or fixed-term tenancy. 

A tenant who gets a notice to quit for unpaid rent has 15 days to:

• pay the landlord all the rent that is past due.  This will cancel the notice to quit; or
• apply to the Director of Residential Tenancies (‘Residential Tenancies’) to dispute the notice to quit; or
• leave, but unpaid rent will still be owed to the landlord.

If the tenant does nothing, and is still in the property 15 days after getting the notice to quit, the landlord can apply to Residential Tenancies for an order requiring the tenant to leave (‘order for vacant possession’).   If the landlord does this the law says Residential Tenancies is not required to investigate, try to mediate, or hold a hearing.  Residential Tenancies can simply make the order for vacant possession and mail it to the landlord and the tenant.  The tenant has 10 days from the date of the order to appeal to Small Claims Court.  If the tenant does not appeal then the Sheriff can evict the tenant.

 No hearing is required, so it is up to the tenant to apply for a hearing within the 15 days if they want to contest the notice and have their say.

Tenants who need to get out of their lease early

Tenants who need to get out of their lease early

To end a yearly lease a tenant must normally give 3 months' written notice before the anniversary date.  

However, a tenant in a yearly lease may give the landlord just one month’s notice to quit if the tenant has:

• lost income because of deteriorating health
• cannot continue the lease or access the premises because of deteriorating health; or
• been admitted to a nursing home or other special care facility.

The tenant must provide a doctor’s certificate, or proof of acceptance into a nursing home.

These short notice rules also apply to tenants in a fixed-term lease.

The tenant must give a copy of the notice to quit to any other tenants living with them, at least 1 month before the tenancy ends.  The tenancy then ends for all tenants, but the remaining tenants may negotiate a new lease with the landlord.  The landlord must agree to do this, unless there is a good reason not to.

There is a further exception to the normal notice periods for ending a lease: a victim of domestic violence may end a yearly or fixed term lease by giving the landlord just 1 month’s written notice, along with a certificate from the Department of Justice, Victim Services.

A victim must first apply to Victim Services for a certificate. Victim Services may give a certificate if either:

• There is an emergency protection order (‘EPO’), and the tenant applied to Victim Services within 90 days of getting the EPO (What is an EPO? Click here);
  OR
• Victim Services is satisfied that:
  • A domestic violence complaint has been filed with the police, naming the tenant as victim; and
  • there is a current peace bond or other ‘no contact’ court order requiring the alleged abuser to stay away from the tenant; and
  • an assessment gives Victim Services reason to believe the tenant is a victim of domestic violence.

Although there is no appeal if Victim Services refuses to grant a certificate, a tenant can apply again if something new happens. Victim Services is not required to hear from the alleged abuser when deciding whether to issue a certificate.

For more information about ending a lease early because of domestic violence:

• NS Department of Justice, Victim Services – 1-888-470-0773 or online at: novascotia.ca/just/victim_Services/
• NS Residential Tenancies: 1 800 670-4357 or 902-424-5200, online at: gov.ns.ca/snsmr/access/land/residential-tenancies.asp
• NS Domestic Violence Resource Centre: nsdomesticviolence.ca
• NS government news release: novascotia.ca/news/release/?id=20130911001

 

Some other rules

Some other rules

• landlords and tenants must use the Residential Tenancies forms, which are available online at accessns.ca/residential-tenancies/forms
• Landlords must provide tenants with a copy of the Residential Tenancies Act (at least one tenant where there are co-tenants) within 10 days of the earliest of:
  • • the tenancy start date, as given in the lease
    • signing the lease
    • getting keys to the residence
    • the date the tenant(s) is allowed to move in.
• Landlords can provide a copy of the Residential Tenancies Act in one of 3 ways: paper copy, electronic copy, link to a copy on the NS legislature website (nslegislature.ca/legc/statutes/residential tenancies.pdf).  Tenants who want a paper copy of the Residential Tenancies Act can get one from Residential Tenancies at 1 800-670-4357 or 902-424-5200, or using their online request form
• tenants in land-lease communities cannot have their rent increased by more than a maximum annual amount (1.1% for 2017), calculated based on regulations under the RTA.  A landlord who wants to increase rent by more than the maximum amount must apply to Residential Tenancies for permission.
• Landords can only increase rent once every 12 months, on the anniversary date of the tenancy, and must give proper written notice of the increase (4 months' notice in a yearly or monthly lease; 8 weeks' notice in a weekly lease).  Rent may be increased by any amount (except land-lease communities and public housing): more about rent increases
• Landlords may charge up to a $75 fee for a sublet or assignment, but only for actual costs incurred
• the Residential Tenancies application fee and Small Claims Court appeal fee can be awarded to the person who wins.

Top Tips from Nova Scotia Residential Tenancies, in several languages

 

Top Tips from Nova Scotia Residential Tenancies

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For more information

For more information

For more information about these and other Residential Tenancies Act rules, or for help with a landlord/tenant issue:

• visit Residential Tenancies online at accessns.ca/residential-tenancies
• call Residential Tenancies at (902) 424-5200 or 1 800 670-4357
• visit your nearest Residential Tenancies office (go to gov.ns.ca/snsmr/offices for locations)
• read Residential Tenancies Guides: novascotia.ca/sns/access/land/residential-tenancies/guides.asp

The Residential Tenancies Act and regulations are available online:  nslegislature.ca/legc/statutes/residential tenancies.pdf and gov.ns.ca/just/regulations/regs/rtgenrl.htm

For more legal information or legal advice:

• Contact a lawyer in private practice , or
• If you are a tenant who has a low income Nova Scotia Legal Aid or Dalhousie Legal Aid Service may be able to help.  Contact them for details.
• Nova Scotia Legal Aid has online legal information for tenants, available at: nslegalaid.ca/legal-information/residential-tenancy/
• Dalhousie Legal Aid Service has a Tenant Rights Guide, available online at: dal.ca/faculty/law/dlas.html
• Office of the Privacy Commissioner of Canada: Privacy in the landlord-tenant relationship 
• Canada Mortgage and Housing Corporation: Your Guide to Renting

What is property tax?

The city collects property taxes from property owners. Property taxes are one of the most important ways money is raised to pay for things like schools, fire and police departments, streetlights and community centres.

How is property tax collected?

Your municipality will send out a tax bill.  For example, in the Halifax Regional Municipality the city sends a tax bill every six months. Payments are due at the end of April and the end of October. The Cape Breton Regional Municipality sends an interim tax bill in April, and a final tax bill in September. Please check with your local municipality for details in your community.

You can generally pay your property taxes in several ways, including: online banking, online credit card payment, in person with a cheque or money order, or as part of your mortgage payment.

How is property tax calculated?

Property taxes are calculated as a percentage of the value of the property. The value of a property or “assessed value” is determined by a not-for-profit organization called the Property Valuation Services Corporation (PVSC).

Assessments are determined by market value, which varies by community and type of home. Tax rates are set by the city, looking at services provided (e.g.,fire, police, schools, sidewalks, transit), along with mandatory contributions for services such as education and corrections.

Are property tax calculations based on the value of the house or the property (land)?

Property taxes are based on the market value, or the price a willing seller would receive from a willing buyer for the property. Any houses or buildings that are on a property affect its value. For example, a property with a house will usually have greater value than a property with no house.

I disagree with the assessed value of my property. What can I do?

You have the right to appeal your property assessment if you disagree with it. You must appeal within 31 days of receiving your Assessment Notice in the mail or epost.

Assessments are mailed out in January each year. You can appeal your assessment by mailing or faxing an appeal form that explains why you are appealing the assessment to the PVSC. The appeal form is attached to your Assessment Notice, and must be received by the PVSC by the date (deadline) indicated on your Assessment Notice.

Contact PVSC toll free at 1-800-380-7775 or visit their website at www.pvsc.ca/en/home/howassessmentworks/appealinformation/default.aspx for more information about the appeal process.

What happens if I don’t pay my property tax?

If your property taxes are not paid on time, the account will fall behind. This is called being “in arrears”.

If this happens, interest will be charged on the amount you owe. For example, in the Halifax Regional Municipality the interest rate charged for accounts that are in arrears is 15% per year (for example if you owe $1,000, after one year you would owe an additional $150 – a total of $1,150).  The interest rate on arrears may differ in other communities across the province, so check with your local municipality.

If property taxes remain unpaid for more than one year, the city has the option of selling the property at a tax sale, or trying to sue on the debt as an alternative to a property tax sale.

What is a tax sale?

Property can be sold at auction if property taxes remain unpaid for more than one year. These tax auctions or sales are open to the public.

The city must try to notify the owner as well as all lien holders about the upcoming tax sale. Notice must be sent by registered letter.

The owner will receive information indicating:

• amount owed
• how much time left to pay
• date of tax sale, and
• estimated extra expenses that could be added.

When it is not possible to notify the owner, the property is posted with a Tax Sale Notice, which is stuck on the door of the property. Properties are sold for the amount of outstanding taxes, interest and expenses owed to the government, which is usually much less than the market value of the property.

Are there programs to help with paying property taxes?

Paying property taxes is an essential part of owning property. Municipalities across Nova Scotia offer some tax relief options, including tax payment deferrals or exemptions for those who have a lower income.  Please check with your local municipality to find out what options are available in your community.

The Halifax Regional Municipality offers three tax relief programs that may help prevent property owners from falling behind on their tax bill, or help if you have already fallen behind on payments. The three programs are payment plans, rebates and deferrals. It is possible to combine these programs or use them individually.

PAYMENT PLAN Instead of making two large property tax payments in April and October, smaller payments can be made every month.

PROPERTY TAX REBATE Rebates are available if the combined net income of the adults living at a property is less than $32,000 per year. The rebate amount is calculated based on the combined income of the adults at the property and the amount of tax owed. This program can change from year to year and is tied in with the cost of living (consumer price index).

DEFERRAL OF PROPERTY TAX PAYMENTS Tax payments can be put off (“deferred”) if the combined income of the adults living at a property is less than $32,000 per year. Owners can choose to defer their entire payment, or just a portion of it. A small interest rate is charged to the deferred tax amount. The interest rate on deferrals in 2014-2015 is around 1%. This program can change from year to year and is tied in with the cost of living (consumer price index). The deadline to apply for these programs is March 31 each year, although this deadline is subject to change, so check with HRM. To apply you must provide proof of income based on your Notice of Assessment (received from the Canada Revenue Agency after income taxes are paid) and an application signed by the property owner. Depending on the individual circumstances, you may need to provide supporting documents to assist with the application. The HRM is pleased to assist those interested in these programs to complete their applications over the phone.

Some legal words you need to know

Arrears – money that is owed and should have been paid earlier. The amount accumulated from the date when the first missed payment was due.

Lien holders – someone who has a right or potential claim against someone’s property. The lien holder is usually a bank or another financial firm. For example a person or financial institution has given you money on loan to buy property or has made improvements to the property.

Market value – amount the property would probably sell for on the open market, with buyer and seller making an informed, voluntary deal. All real property is assigned a market value assessment by professional assessors employed by Property Valuation Services Corporation, on behalf of the Province. This value is based on such factors as construction quality, location and age of the property. This value may be adjusted annually to reflect changes that could go up or down in the market value of property in your area.

Notice of Assessment – a notice sent to property owners advising them of the current assessed property value for property (municipal) tax purposes.

Property assessment – the process of establishing a dollar value for property for property tax purposes. Property Valuation Services Corporation (PVSC) – responsible for property assessments in Nova Scotia.

Taxable Assessed Value – the assessment used to determine annual property taxes.

Property Valuation Services Corporation (PVSC)

Property Valuation Services Corporation (PVSC)
Website: www.pvsc.ca/en/home
Telephone: 1-800-380-7775

Your municipality

Halifax Regional Municipality (Halifax)
Taxes Website: www.halifax.ca/taxes
Telephone: call 311 or 902-490-5016

Cape Breton Regional Municipality (CBRM)
Website: www.cbrm.ns.ca/
Telephone: 902-563-5025 or 902-563-5080 (Citizen Service Centre)

Click here to find your municipality.

Legislation that applies

Nova Scotia Assessment Act
Nova Scotia Municipal Government Act

Nova Scotia Legal Aid: Prestons Outreach Facilitator

For information about Nova Scotia Legal Aid's outreach in the Preston communities, or to make an appointment, contact:

Morgan Tulk
Preston Outreach on-site facilitator
cell: 902-225-3854
Email: [email protected]

Selling your Home

• What is my first step if I plan to sell my home?
• How do I list my house with a real estate agent?
• Can I have the same real estate agent as the purchaser?
• Do I need a lawyer if I’m selling my home?
• Do I have to pay off my mortgage before I can put my house up for sale?
• What happens when an offer is made on my house?
• When I sell my home, what fixtures are included in the sale?
• What is a property condition disclosure statement?
• Do I need to add sales tax to the selling price?
• Must I register my home under the new Land Registration Act before I sell?
• When do I have to move out of the house?

Q- What is my first step if I plan to sell my home?

You should get an idea of the market value of your home, that is, what you can expect to sell it for. One way to do this is to get a professional appraisal. They are listed in the yellow pages of the phone book under ‘Appraisers.’ It costs around $200 for an appraisal. Appraisals are based on what houses similar to yours sell for in your area as well as replacement costs. Another option is to contact a real estate agent. He or she will be able to give you a good idea of what you can expect to sell your house for based on what other houses are selling for in your area.

Q- How do I list my house with a real estate agent?

There are many agents to choose from. You should find someone who knows the area you live in. Family, friends or people you work with may be able to recommend an agent. Real estate agents fees may vary so you should find out as much as you can about how much an agent charges. Some owners choose to sell their house without using an agent and there are businesses that provide services to help people do this for example by providing signs and draft documents. Although this costs less than hiring a agent, you will have to be prepared to advertise and show the property yourself and will not have access to the same resources as a professional agent.

If you decide to hire an agent, you will have to sign a listing agreement. Carefully read through the agreement and be sure that you understand the charges and commissions you can expect to pay and what to expect from the agent. You and your agent will discuss whether it should be a multiple or exclusive listing. Multiple listings give you broader exposure, but you may pay a higher commission. Generally, the agent will be entitled to his or her commission when a buyer who is ready, willing and able signs an offer to purchase your home at the price you and your agent agreed to sell it for. Depending on the listing agreement, even if the transaction falls through, you may still have to pay a commission. You may also have to pay a commission if you sell the house yourself while the listing agreement is in effect, or if you sell it after the listing agreement has expired, and the agent was the ‘effective cause’ of the sale. For example, the buyer came to an open house arranged by the agent and later makes an offer to purchase after the listing agreement has expired.

Q- Can I have the same real estate agent as the purchaser?

Yes but is recommended you hire a real estate agent that is not representing the purchaser. This is to ensure that he or she will solely serve your interests in the home selling process. If one of your real estate agent’s clients wishes to purchase your property, the agent must inform you. An agent who represents both the seller and the purchaser, is not permitted to advise one party against the interests of the other party. As the seller you still pay the agent’s fee.

Q- Do I need a lawyer if I’m selling my home?

Yes. Your lawyer will advise you, ensure that the documentation is prepared and that the property is registered prior to closing, receive the money from the purchaser’s lawyer on closing day, pay off the amount owing on your mortgage, and provide you with an accounting of the proceeds from the sale. You should not use the same lawyer as the purchaser.

Q- Do I have to pay off my mortgage before I can put my house up for sale?

No. You should contact the financial institution holding your mortgage to find out exactly how much is left owing on the mortgage. Find out if you can pay off the mortgage early, and if so, is there a penalty. Ask that this information be put in writing for you. If you sell your home and you owe money on a mortgage, on the closing date for the sale, your lawyer will arrange for the amount owing on the mortgage to be paid off from the proceeds of sale and for a release to be issued by the financial institution. You can also ask the financial institution if the mortgage is assumable. That is, can the purchaser simply take over the mortgage from you, the seller? If it is assumable, will you be released from any further obligations under the mortgage? Again ask for this to be put in writing.

Q- What happens when an offer is made on my house?

Your real estate agent will review any offer made with you in detail. He or she will ensure that you fully understand the offer and you are satisfied with it. If you are not satisfied with the offered price or with any of the conditions, you can reject the offer. You can also make a counter offer. Your real estate agent can help you prepare a counter-offer. You can decide whether to make this your final offer or whether you will consider a counter-offer from the purchaser. If you and purchaser cannot agree on an acceptable offer, you can end the negotiation. If you reach an agreement, the purchaser makes a deposit on the house which is held by the estate agent in trust until closing.

Q- When I sell my home, what fixtures are included in the sale?

When someone buys your house, all fixtures are included, unless you clearly exclude them in the agreement to purchase. Legally, ‘fixtures’ include anything that is attached to the house in a permanent way so that its removal would leave obvious damage or a scar. Permanent attachment can include anything that is plastered, bolted, screwed or nailed in place. For example, wall to wall carpeting, a sink and central air conditioning would all be considered fixtures, while a throw-rug, free standing cupboard, and washing machine would not, unless you have agreed with the purchaser to include them.

Q- What is a property condition disclosure statement?

A Property Disclosure Statement is a report prepared by the seller for the purchaser. It discloses information known to the seller about the existing condition of the property. It contains information that the seller is aware of about such things as the age of the roof and electrical wiring, any problems with leaks or water damage, etc. Your lawyer can advise you on preparing this statement. The statement may help the purchaser decide whether any aspects of the house need further inspection, for example, the roof, electrical wiring or heating system.

Q- Do I need to add sales tax to the selling price?

Generally speaking no, sales tax (HST) is not collected from the sale of used private homes. I if you are selling the home that you currently live in it is unlikely that you will have to collect HST. However, if you have done significant renovations or the house you are selling is a newly built house, you should contact the Canada Revenue Agency to find out if you need to collect any taxes. You should also talk with your lawyer. The Canada Revenue Agency is listed under ‘Taxes’ in the government blue pages of your telephone book

Q- Must I register my home under the new Land Registration Act before I sell?

If the home you are selling is not yet registered under the new Land Registration Act, it must be registered before the completion of the sale of the home. This is also referred to as having the property migrated or converted. There is a registration fee. It is up to the purchaser and the seller to negotiate who covers the costs involved. The practice has developed that the seller usually registers the property and pays the registration fee. Usually the cost will be between $500 and $1000 plus tax. Your lawyer can provide advice on this and on other costs involved in selling your home. Once a property is registered under the new registration system it will not need to be registered again. For more information on registering property and the new Land Registration Act you can visit the website of the Land Registration Office of Nova Scotia.

Q- When do I have to move out of the house?

The purchaser is entitled to vacant possession once the funds are released to your lawyer and the sale is complete so you must arrange to move out on or before closing day. Most often the agreement to purchase will contain a closing date. This is the date the house must be vacant. Usually the exact time of day is not included. Keep in mind you do not receive your sale proceeds until the house is vacant, and most often you will require the proceeds to purchase your new home.

 

 

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