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Writ of Seizure and Sale of Land: Enforcement via Registration of Financial Interest upon Realty of Debtor
Question: How does a Writ of Seizure and Sale of Land affect a debtor's principal residence?
Answer: A Writ of Seizure and Sale of Land enables a creditor to target a debtor's real property to satisfy a judgment. However, under the Execution Act, R.S.O. 1990, c. E.24, a debtor's principal residence is exempt from seizure if the equity value is below the prescribed amount of $10,783. This protects the debtor's home from forced sale unless equity surpasses that threshold, emphasizing the importance of understanding these nuances to responsibly enforce or navigate such legal actions. For guidance on managing legal processes related to property seizures, consider discussing your options with Caruso Legal Services.
Placing Rights Upon Real Estate Holdings
The Writ of Seizure and Sale of Land (Form 20D) is a powerful enforcement tool that allows a Creditor to satisfy a Judgment by targeting real property owned by the Debtor. This Writ authorizes an enforcement officer, typically a Sheriff, to seize and sell real property belonging to the Debtor in order to recover the amount owing under a Judgment.
The process begins with the Creditor filing the Writ of Seizure and Sale of Land (Form 20D) within the jurisdiction where the property is located. This document must include essential information, such as the amount of the Judgment, the legal description of the property, and details of the Debtor. Once filed, the Sheriff will register the Writ against the title of the property. This registration creates a lien, which effectively prevents the Debtor from selling or refinancing the property without first satisfying the Judgment.
Principal Residence Exempted
Under the Execution Act, R.S.O. 1990, c. E.24, certain exemptions apply to the seizure and sale of a principal residence of the Debtor. Specifically, section 2(2) states that the principal residence of a Debtor is exempt from forced seizure or sale by any legal process if the value of the equity of the Debtor in the principal residence is less than the prescribed amount. According to the relevant regulation, being Exemptions, O. Reg. 657/05, the prescribed amount for the purposes of subsections 2(2) and (3) of the Act is $10,783 (as of January 2025 and as is subject to change); however, if the value of the equity of the Debtor exceeds this amount, the principal residence becomes subject to seizure and sale under the Execution Act. It is crucial to mindful of this exemption when targeting a principal residence.
Exemptions
Principal residence of debtor
2 (2) The principal residence of a debtor is exempt from forced seizure or sale by any process at law or in equity if the value of the debtor’s equity in the principal residence does not exceed the prescribed amount.
Principal residence exceeding exempted value
(3) Despite subsection (2), if the value of the debtor’s equity in the principal residence exceeds the prescribed amount, the principal residence is subject to seizure and sale under this Act.
Waiting Period
Before a Sheriff can commence the sale of land under a Writ of Seizure and Sale of Land (Form 20D), there is generally a waiting period that must be observed. The Rules of the Small Claims Court, O. Reg. 258/98, stipulate that the Creditor must wait a minimum of four months after filing the Writ of Seizure and Sale of Land (Form 20D) before taking any steps to sell the property and that the Sheriff must wait a minimum of six months after registering the Writ before proceeding with the sale. This waiting period provides the Debtor with an opportunity to pay off the debt or to resolve the Judgment without the need for a forced sale of the land (real property). This period also ensures adequate time for proper notices and allows other creditors or interested parties to make claims against the property.
The waiting period as well as certain notice requirements, among other things, are addressed within section 20.07(2) of the Rules of the Small Claims Court, O. Reg. 258/98, when read in combination with, as is required, Rule 60.07(17) through Rule 60.07(22) of the Rules of Civil Procedure, R.R.O. 1990, Regulation 194, whereas such state:
Application of Rules of Civil Procedure to Issued Writ
20.07 (2) Subject to subrules (3) and (4), the Rules of Civil Procedure apply for all purposes instead of these rules to an issued writ of seizure and sale of land, as if the writ were a writ of seizure and sale issued under rule 60.07 of those Rules.
Sale of Land
60.07 (17) A creditor may not take any step to sell land under a writ of seizure and sale until four months after the writ was filed with the sheriff or, where the writ has been withdrawn, four months after the writ was re-filed.
(18) No sale of land under a writ of seizure and sale may be held until six months after the writ was filed with the sheriff or, where the writ has been withdrawn, six months after the writ was re-filed.
(19) A sale of land shall not be held under a writ of seizure and sale unless notice of the time and place of sale has been,
(a) mailed to the creditor at the address shown on the writ or to the creditor’s lawyer and to the debtor at the debtor’s last known address, at least thirty days before the sale;
(b) published in The Ontario Gazette once at least thirty days before the sale and in a newspaper of general circulation in the place where the land is situate, once each week for two successive weeks, the last notice to be published not less than one week nor more than three weeks before the date of sale; and
(c) posted in a conspicuous place in the sheriff’s office for at least thirty days before the sale.
(20) The notice shall set out,
(a) a short description of the property to be sold;
(b) the short title of the proceeding;
(c) the time and place of the intended sale; and
(d) the name of the debtor whose interest is to be sold.
(21) The sheriff may adjourn a sale to a later date where the sheriff considers it necessary in order to realize the best price that can be obtained in all the circumstances, and where the sale is adjourned, it may be conducted on the later date with such further notice, if any, as the sheriff considers advisable.
(22) Where notice of a sale of land under a writ of seizure and sale is published in The Ontario Gazette before the writ expires, the sale may be completed by a sale and transfer of the land after the writ expires.
Liquidation Procedures
As per the various Rules provided above, after the Writ is registered and after the prescribed waiting periods elapse, a Creditor may direct the enforcement officer to arrange for the sale of the property by public auction. Similarly to the process for personal property, the Sheriff must provide notice of the pending sale to both the Debtor and the public. Notice of the auction is typically published in a local newspaper, providing details regarding the date, time, and location of the sale, as well as a description of the property being sold. The Debtor is also served with notice, which gives them an opportunity to pay the debt before the sale proceeds.
The proceeds from the sale are used to satisfy the Judgment, after deducting any applicable enforcement costs, including legal fees and administrative expenses. It is important to note that certain rights, such as the rights of other secured creditors or mortgagees, may take precedence over the claim of the Creditor.
Conclusion
The Writ of Seizure and Sale of Land (Form 20D) may provide an effective means for the enforcing a Judgment when realty is owned by a Debtor. Creditors, by understanding the procedures and legal requirements involved, may effectively use this enforcement tool to recover monies through the sale of real estate assets. Due to various complexities, professional assistance should be sought.
