THE PROBLEM OF PRICE ADEQUACY IN FORECLOSURE SALES

Abstract

The author's thesis, made more compelling by the phenomena of Canada's recessionary period; is that a majority of provinces subscribe to liquidation processes on the forced sale of mortgageed property which fail to ensure the adequacy of the sale price. Whether a sale is effected in the judicial forum or under a power of sale, the problem of price adequacy, generated principally by the adherence to ineffective marketing techniques, will persist, regardless of the economic climate. The relative acuteness of the problem is revealed in those jurisdictions where the creditors are permitted to purchase their security. While the principal purpose of the article is to expose the problem and its cause, consideration is also given to formulating and applying a proper standard of care to be exercised by a mortgagee in carrying out a sale.