How creditors foreclose farmland in Saskatchewan
In order to foreclosure farmland in Saskatchewan the creditor must complete the following processes which are set out in Part II of The Saskatchewan Farm Security Act (the Act):
- Serve the farmer and the Farm Land Security Board (the Board) with a Notice of Intention to Foreclose. The notice must answer all the questions prescribed in section 7 of the regulations to the Act. (See FAQ #4)
- Allow 60 days after serving Notice for the Board to review the affairs of the farmer and provide a copy of the review to the farmer, the creditor and to the mediator.
- Participate in mediation for up to 45 days.
- Request and receive a copy of the Board report to the court.
Generally, only after these 150 days have expired and after the Board provides its report to the court, may the creditor approach the court. The creditor may allow additional time beyond the statutory 150 days. Non-participation by the farmer may shorten the 150-day period.
Ignoring or evading a Notice can have unforeseen negative consequences for the farmer.
See Part II of the Act for additional detail about a Notice of Intention to foreclose and the processes of financial review, mediation, and court reporting, or contact the Board office.
Notice of Intention to Foreclose
A Notice of Intention to Foreclose is required by The Saskatchewan Farm Security Act (see Section 7 of The Saskatchewan Farm Security Regulations). The Act requires the Notice be served on the farmer and on the Board. The Notice advises the farmer and the Board that the creditor intends to apply for the court’s permission to foreclose a mortgage. The Notice clearly states the details of the mortgage loan, the farm land that is secured to the mortgage, and the obligations of the farmer. Once Notice is served on both the Board and the farmer the 150 day period of financial review, mediation, and court reporting commences.
Information required for a Notice of Intention
Section 7 of The Saskatchewan Farm Security Regulations states that in the case of a mortgage, the following information is mandatory:
- the name of the judicial center where the court application is to be made;
- mortgagor’s name and address (phone number is useful);
- mortgagee’s name and address (contact name, phone & fax numbers are useful);
- description of property;
- date of execution of the mortgage;
- original amount of the mortgage;
- mortgage balance of outstanding;
- interest rate;
- installments payable;
- the arrears on the principal + interest = total arrears;
- a copy of the mortgage.
In the case of a money judgment (writ), the regulations to the Act require:
- the name of the judicial center where the court application is to be made;
- the date the judgment was executed;
- the amount to be collected; and,
- a copy of the judgment.
A Notice served on the Board is to be accompanied by a fee of $250 per mortgage. If two or more mortgages are attached to the Notice, respecting the same mortgagor, the maximum fee is $500. Cheques are payable to the Minister of Finance.
What happens after Notice is served
- The Board writes the parties to acknowledge service of the Notice.
- A consultant is assigned to work with the farmer.
- The consultant contacts the farmer and the creditor.
- The consultant arranges to meet with the farmer.
- The farmer and the consultant analyze the farm financial situation.
- A statement of the farmer’s affairs is drafted by the consultant including assets, liabilities and historical and projected cash flow.
- The farmer and consultant discuss the statement in preparation for mediation.
- A mediation meeting is arranged by the consultant.
- The Dispute Resolution Office (DRO) assigns a mediator.
- The farmer’s Statement of Affairs is distributed to the parties and the mediator.
- The parties, their representatives, the consultant, and the mediator meet for mediation
- Both parties must sign an agreement to mediate.
- Mediation efforts may go 45 days or longer if all agree.
- The mediator advises the DRO whether mediation was successful or not; DRO then advises the Board.
- If mediation fails the creditor must request the Board prepare its report to the court.
- A preliminary report is adopted by the Board and provided to the parties.
- Once advised of the court file number (Q.B. #) the report is filed with the court.
- See the Public Legal Education Association of Saskatchewan “Farm Financial Difficulties” publication.
Financial review process
The financial review includes a visit to the farm by a Board consultant who will work with the farm family to ensure there is a broad understanding of their and the creditor’s rights and obligations. The consultant will review the farmer’s assets, liabilities and historical cash flow. From that information the consultant will develop a projected cash flow. This information is consolidated into a statement of the farmer’s financial affairs. This process of financial analysis will help prepare the farmer for a productive mediation meeting. The consultant may meet with the farm family more than once for this purpose. Once a mediation date is set the statement is distributed to the farmer, the creditor and the mediator. It forms the basis of mediation discussions.
How mediation works
Once the farmer agrees to attend mediation, the consultant will arrange a mediation date suitable to all parties. At the meeting the parties will sign an agreement which sets out how mediation will be conducted and the expectations the mediator has of both parties. Mediation cannot occur if either party will not sign the agreement to mediate.
The farmer and the creditor will each meet separately with the mediator to discuss their understanding of the matter and how to resolve it. If agreeable, the mediator will bring all parties together to discuss solutions and help them work toward an agreement. At the end of the meeting, or shortly thereafter, the mediator will provide the parties a summary of what was concluded. The mediator and consultant will continue to work with the parties as long as progress is being made.
For more detailed information about mediation contact the Dispute Resolution Office at 306 787-5747.
Both parties to the mortgage must attend. Either party may bring any representative they wish. The consultant and the mediator also attend.
The Act allows up to 45 days for mediation efforts. The mediator may close mediation prior to Day 45 if an agreement is reached or if the mediator decides no progress is being made. The mediator officially closes mediation with a letter to the DRO stating whether mediation was successful or not. DRO then informs the parties and the Board.
The creditor can ask the mediator to close mediation at any time; however it is solely the mediator’s decision to close mediation prior to the 45 days allowed in the Act.
Obtaining the Board report to the court
- Where mediation did not occur
Sixty days following service of the Notice, and no mediation date set, the creditor can request the Board prepare its report. The Board will not generally issue the report until Day 105.
- Where mediation has occurred and the mediator has closed mediation
Once the Mediator closes mediation the Dispute Resolution Office will send letters to the parties and to the Board office indicating mediation has closed. The creditor may then request the Board to prepare its report.
- Where mediation has occurred and the mediator has not closed mediation
The creditor must formally request the mediator cease mediation. Creditor requests for the Board report received prior to mediation closing will be directed to the Dispute Resolution Office. The Board will not begin drafting its report until it is formally advised by the Dispute Resolution Office that mediation is closed.
Once a report is complete, a preliminary draft is mailed to the parties. Upon provision of a Queen’s Bench number, the Board will file the original report with the court.
Board Report Process
Upon receiving a court report request, the Board will write the parties to solicit their views about why the matter is proceeding to court. The Board also assigns a report researcher to review the file, contact the parties, clarify the facts, and present a summary of the findings to the Board. Notice files that did not proceed to mediation have their court reports issued administratively.
The researcher also works with the Farm Land Security manager to ensure all relevant information is available for the Board. The researcher and the manager will decide when it is necessary for the parties to meet with the Board. Any party may request to meet with the Board
Notice files that did proceed to mediation have a research report presented to a meeting of the Board. Board members review and question the entire report before making their conclusions. The Board may decide to add comments to the report which speak to a specific issue or Board concern. The Board may also decide additional information is required, including meeting with the parties, before the report can be concluded. The report would then be tabled to return to the next Board meeting.
Once the Board has made its conclusions a preliminary report is sent to the parties. Once provided a court file number (Q.B. #), the Board will file the original report with the court.
Questioning the Board report
The Board will consider amending its report until it is filed with the court. Either party to the mortgage may contact the Board office to discuss changes to the report. After the report is filed with the court the Board will consider drafting a report addendum. Report changes take time and may require postponement of court dates.
Ignoring or evading the Notice to avoid foreclosure by a farmer
If the farmer cannot be served by registered mail the creditor can apply to court for its direction about substitutional service. The court may order a variety of substitutional service options such as the Notice be tacked to the farmer’s residence or posted in local papers or the municipal office.
Once the Notice is served the 150 day total statutory time frames commence. These time frames dictate when the Board must provide its report to the court. Typically it will release its report at Day 105. At court the creditor will ask the court’s permission to proceed into foreclosure.
If the farmer fails to appear, the court is likely to allow foreclosure to proceed.