Behind on your mortgage in Quebec: what happens and can you still sell?

What happens after you miss mortgage payments in Quebec?

A missed payment is a default. Éducaloi says a debtor is in default by failing to do what was promised, and it gives a missed monthly payment as the example. The same page says the contract can name other defaults. Letting the house insurance lapse is the example Éducaloi uses. The FCAC says mortgage default is failing to follow the mortgage agreement, such as missing a regular payment, and that the bank then has a legal right to recover what is owed. That recovery may eventually lead to a forced sale. The agreement is the place that lists the default clauses for one loan. This page will not invent a number of missed payments that “starts” a file.

You remain the owner while that file opens. The AMF glossary says the person who takes the loan stays the owner of the house, and that if the loan is not repaid on the terms of the contract, the bank can sell the house to satisfy the debt. Article 2748 is more precise than that sentence. Besides the personal action and the provisional measures in the Code of Civil Procedure, a hypothecary creditor may use only the rights in that chapter, and only where the debtor is in default and the claim is liquid and due: take possession of the property to administer it, take it in payment, cause it to be sold under judicial authority, or sell it. Article 2749 says those rights may not be exercised before the surrender period in article 2758 has expired. A missed payment does not move title the next morning.

What is a prior notice of exercise of a hypothecary right?

It is the notice the creditor must file before exercising a hypothecary right. It is not the right itself. Article 2757 says the creditor files a prior notice at the registry office, together with evidence that it has been served on the debtor and, where applicable, on the grantor and on any other person against whom the right will be exercised. Registration of the notice is notified under the Book on Publication of Rights. For a house, that registry is the land register. The OACIQ says the same sequence: the notice is served, then published with proof of service. The land register guide for this notice quotes article 2757 and lists four natures: taking possession, taking in payment, sale by the creditor, and sale under judicial authority.

Article 2758 sets out what the notice must say. It discloses the failure to perform, and it reminds the debtor, or a third person where that applies, of the right to remedy the default. It states the amount of the claim in capital and in interest, if any, and the hypothecary right the creditor intends to exercise. It describes the property. It demands that the person against whom the right is exercised surrender the property before the period in the notice expires. Éducaloi adds a point the notice itself does not decide: registering a prior notice is not enough to exercise the rights. If you say the default is not real, the creditor still has to prove it, and the registration can be contested. The index of immovables on the Registre foncier du Québec en ligne is where a published notice can be read. The registration number, not the day the envelope arrived, is the date that matters for the clock below.

How long do you have before the lender can act?

On a house, 60 days after the prior notice is registered, unless the notice says the creditor intends to take possession of the property to administer it. Article 2758 counts the period from registration. It is not counted from the missed payment, and it is not counted from the day of service. The same article sets 20 days for movable property, 30 days for movable property charged with a hypothec in an act accessory to a consumer contract, and 10 days if the creditor intends to take possession. Article 2749 forbids the creditor to exercise the hypothecary right before that period has expired.

There is one court door that can open sooner. Article 2767 says surrender is also forced where the court, on the creditor’s application, orders it before the period expires, where there is reason to fear that recovery of the claim may otherwise be endangered, or where the property may decline or depreciate rapidly. In those latter cases the creditor is authorized to exercise the rights immediately. The application need not be served first, but the order is served. If the order is later rescinded, the creditor must return the property or pay back the price of alienation. That is not the ordinary house file. A notary or a lawyer is the person who reads whether a notice in your hands is the 60-day notice or something else.

Can you still remedy the default after the notice?

Yes. Article 2761 says the debtor, the person against whom the hypothecary right is exercised, or any other interested person, may defeat the exercise by paying the creditor the amount owing, or by remedying the omission or breach set out in the notice and any later omission or breach, and in either case by paying the costs incurred. That right may be exercised before the property is taken in payment or sold. If the right being exercised is taking in possession, it may be exercised at any time. Éducaloi states the same two paths, payment of what is owed or correction of the default, plus the costs, and it says a negotiation with the creditor is also open.

The 60 days and this right are not the same clock. Article 2749 is the wait before the creditor may act. Article 2761 runs until taking in payment or a sale, which can be later than day 60. The OACIQ puts it in shorter words: paying within the period makes the recourse unnecessary. The Code is the wider rule. This page will not quote a tariff for the bailiff, the registration or the cancellation. Those costs are part of what article 2761 requires you to pay, and the notice plus the creditor’s statement are the figures for one file.

What is voluntary surrender, and what is forced surrender?

Surrender, délaissement, is giving up the property so the creditor can exercise the right named in the notice. The notice demands it. The notice is not an order to move out, and it is not a title. Article 2764 says surrender is voluntary where, before the period in the notice expires, the person against whom the right is exercised abandons the property so the creditor may take possession, or consents in writing to turn it over at an agreed time. If the right is taking in payment, that voluntary surrender is recorded in an act made by the person surrendering and accepted by the creditor.

Surrender is forced where the court orders it. Article 2765 says the court does that after ascertaining the claim, the debtor’s default, the refusal to surrender voluntarily, and the absence of a valid cause for objection. The judgment fixes the period for surrender, the manner of it, and the person in whose favour it is carried out. Article 2781 then says that, if the default was not remedied and payment was not made in the time allotted for surrender, the creditor takes the property in payment by the effect of that judgment, or by the voluntary act accepted by the creditor, unless a later-ranking creditor or the debtor required a sale. The judgment, or the accepted act, is the creditor’s title. Signing a surrender is not a casual reply to a letter. A notary or a lawyer reads that act before anyone signs it. This page will not tell you to sign one or to refuse one.

Can you still sell the house yourself before the lender takes it?

Yes, if the creditor is paid or agrees. Article 2760 says a voluntary sale of the charged property, made after the creditor has registered the prior notice, may not be set up against the creditor unless the buyer, with the creditor’s consent, personally assumes the debt, or unless a sum sufficient to cover the debt, the interest due and the costs incurred by the creditor is deposited. In plain words: you can still sell, and the creditor is paid from the price, or the creditor consents to an assumption. A private deal that does neither does not erase the notice. The OACIQ notes that the creditor generally wants to be paid, and that a sale before the period expires can reimburse the bank. Our shorter page (Behind on the mortgage in Montreal) is the same limit in fewer words. “Reprise de financement” is the assumption in that article. It is a conversation with the creditor, not a right that appears because a buyer was found.

A sale you make usually leaves you the value above the debt. Taking in payment does not. Once the creditor has taken the property in payment, article 2781 makes the judgment or the accepted act the title, and article 2782 says taking in payment extinguishes the obligation. The creditor becomes owner of the property, and article 2783 dates that ownership from the registration of the prior notice, free of hypothecs published after the creditor’s. Value above the debt is not paid back to you as cash. Article 2778 adds a brake: if, when the prior notice was registered, you had already paid one-half or more of the obligation secured by the hypothec, the creditor needs court authorization to take the property in payment, unless surrender was voluntary. During the time allotted for surrender, article 2779 lets you, or a later-ranking hypothecary creditor, require the creditor to abandon taking in payment and to sell the property, or to have it sold under judicial authority. The person who requires that must first register a notice, reimburse the costs and advance the sums needed for the sale. A later creditor who requires the sale must also give security that the price will pay the claim in full. Article 2780 says the creditor who is required to sell must sell, unless that creditor prefers to pay the later creditors who registered the notice or, if you registered it, unless the court authorizes taking in payment on conditions the court sets.

Sale by the creditor in person is a narrow right. Article 2784 allows it for a creditor who holds a hypothec on the property of an enterprise, after surrender, by agreement, by a call for tenders or by auction. Article 2785 says that sale is made without unnecessary delay, at a commercially reasonable price, and in the best interest of the person against whom the right is exercised. A house that is not property of an enterprise is not that article. The sale the Code describes for the ordinary case is a sale under judicial authority. Article 2791 says the court designates the person who will conduct it, fixes the conditions and charges, indicates whether it may be by agreement, a call for tenders or auction, and may, after enquiring into the value, fix an upset price. That person must be independent of the interested persons and qualified to conduct the sale. Article 742 of the Code of Civil Procedure says this kind of sale, as distinct from a sale to execute a judgment, is the responsibility of the person designated under article 2791. Our article on an ordinary payoff (Can you sell a house with a mortgage in Quebec?) is how the notary pays a hypothec from the price when the numbers cover it.

What happens to any balance or shortfall?

It depends which right is used. Taking in payment extinguishes the obligation. That is the first paragraph of article 2782. The second paragraph says the creditor who has taken the property in payment may not claim what that creditor pays to a prior creditor or to a hypothecary creditor who ranks ahead, and has no subrogation against the former debtor for that payment. A sale is different. Article 2760 still requires the debt, the interest due and the costs to be covered, or an assumption the creditor accepts, before the sale can be set up against the creditor. The Code does not give a sale the extinguishing sentence that article 2782 gives to taking in payment. Article 2748 keeps the personal action alongside the hypothecary rights. If the price does not cover the claim, this page will not invent the unpaid balance or say that it vanishes. The creditor, the notary and, if a court file is open, the court are the ones who say what remains.

If the price is higher, what is left is what remains after the hypothecary creditor and any earlier-ranking published rights are paid. Éducaloi explains that hypothecs published first are paid before hypothecs published later. The Gouvernement du Québec says that, once the loan is repaid, a notary or a lawyer prepares the document that radiates the hypothec at the land register, that only a notary or a lawyer may prepare it, and that the professional’s fee and the publication costs are usually the borrower’s. A sale is one of the moments when that radiation is often required. The Chambre des notaires distinguishes a quittance, which is the creditor’s acknowledgement of full payment, from a mainlevée, which authorizes the registrar to strike the hypothec without that acknowledgement. Our costs article (The real costs of selling a house in Quebec) puts the discharge and a prepayment penalty next to the other costs of a sale. The FCAC expects a bank, when you are at risk of default and you sell your primary residence, to waive the prepayment penalty. That is an expectation for a federally regulated lender. It is not a clause this page can enforce, and a caisse or a private lender is not inside that federal expectation merely because the sentence exists. If a bankruptcy or a consumer proposal is also in view, the licensed insolvency trustee has to be in the conversation before a deed is signed (Sell a house in bankruptcy or before a proposal). A sale is not a way to hide equity.

What can you ask the lender before it comes to a notice?

Call the lender before the notice, and still call if the notice is already registered. The FCAC expects banks, and other federally regulated mortgage lenders, to help a person who has a residential mortgage on a principal residence and is at risk of missing payments because of exceptional circumstances. The examples the FCAC gives are the combined effect of high household debt, a higher cost of living, and rapid increases in interest rates. If a relief measure is offered, the lender is expected to explain, in a clear way and before you consent, the balance owing before the measure, the effect on the total cost in dollars, the effect on the amortization, the new payment, the new rate and type, and the date the change takes effect. Express consent is required. While you and the bank are looking for a solution, the FCAC expects temporary relief that can include waiving a prepayment penalty on a lump sum made to avoid negative amortization, waiving that penalty when you sell the primary residence, waiving internal fees for a limited period when the measure starts, and avoiding interest on interest for a limited period if the measure causes negative amortization.

A payment deferral is one of those measures, and it is not automatic once you are already behind. The FCAC describes it as an agreement to delay payments for a set period, usually up to four months. Afterward you owe more than before, the payment may be higher, and the amortization may be longer. The deferred amounts can cost thousands of dollars over the life of the loan. The FCAC says you may be able to get a deferral only if the mortgage is up to date and in good standing, it is on your principal residence, the difficulty comes from exceptional circumstances, and you are at risk of default. A loan that is already in arrears may fail that first condition. Ask. Do not assume the deferral is still open. Extending the amortization to shrink the payment can add tens of thousands of dollars of interest. The FCAC says to think twice. Selling is an option the FCAC names when the difficulty is severe, and the lender is expected to explain what selling means in your circumstances. A Quebec caisse or a private lender follows its contract and the Civil Code. It is not swept into the federal expectations by this paragraph. The AMF fraud page says that, in financial difficulty, you talk to the current lender about changing terms, and it warns against “help” that asks you to transfer the house for a time, or to grant a hypothec, while you stay as a tenant. In the pattern the AMF describes, the equity ends up with the other person.

Where can you get help, and can a sale to Bruce fit your date?

Éducaloi’s hypothec page is general information about Quebec law, and it says to consult a notary or a lawyer for the rules in one file. The Gouvernement du Québec page on the end of a hypothec, updated 21 November 2025, says the same professions prepare the radiation. The Chambre des notaires explains quittance and mainlevée. The land register shows whether a prior notice is published. The OACIQ prior-notice page restates articles 2757, 2758 and 2760 for brokers; where a sentence there is shorter than the article, the article is the one to follow. The FCAC pages cover what a federally regulated lender is expected to discuss. The AMF glossary is the Quebec description of a hypothec, and its fraud page is the warning about signing the house over.

A missed payment can show on a credit file. The FCAC says a credit report may include mortgage information and mortgage payment history, and whether payments were on time or missed. It says the score goes up when bills are paid on time and goes down when payments are missed or there is too much debt. Scores usually range from 300 to 900. The FCAC does not publish a point drop for one missed hypothec payment, so this page will not invent one. There is a separate rule for an agreed miss: if the bank has agreed that you may miss payments as part of a relief measure, the FCAC expects the bank not to report that missed payment to the credit bureaus. The AMF page on the credit file says the file includes repayment habits on loans, hypothecary loans included, and that an account can be opened and consulted free online at Equifax and TransUnion. Some other products those agencies sell are paid. If a bankruptcy is the path instead, it is the trustee’s file, not a buyer’s.

Bruce Malcolm buys the house himself, in Montreal and on the West Island. He holds no broker, agent or appraiser licence, and this page is not legal advice. The offer is cash paid at the notary. It does not take over the hypothec, and it does not stop a taking in payment. There is no parade of visits. The day you name becomes a signing day only when the notary can receive the deed and the creditor will still take the payout. This page will not promise that the day falls inside the 60 days. Mention the arrears when you send the address (request an offer). The form does not commit you. Our article on timing (How fast can you sell a house in Montreal?) explains why the notary’s file, not a wish, sets that day, and our article on leaving (When do you have to move out after selling a house in Quebec?) covers the occupancy date once a deed is actually signed.