Definition
Mortgage creditor protection encompasses all legal rights and remedies a lender holds when a borrower fails to meet their mortgage obligations.
**Remedies in Quebec (Civil Code)**: 1. **Taking in payment**: the lender takes possession of the property in settlement of the debt — most common in Quebec. Effects: debt extinguishment + transfer of ownership to the lender (unlike common law where the debt may persist) 2. **Judicial sale**: the lender forces the judicial sale of the property; proceeds repay the debt 3. **Sale by creditor**: the lender sells the property itself (less common, requires 20/60 day notice) 4. **Taking possession for administrative purposes**: conservatory measure, rare in residential
**Creditor ranking**: - Priority order follows the registration rank at the Land Registry - First-ranking mortgages are repaid first - Legal hypothecs (e.g., construction claim) may take priority even if registered later
**Mandatory notice**: Before exercising any remedy, the lender must publish a notice of exercise of hypothecary right: - 20 days (residential building of 5 units or fewer) - 60 days (commercial or residential building >5 units)
This period allows the borrower to remedy the situation or third-party creditors to object.