Encyclopedia
Conduct of sale
A court order giving a lender or other party control of the sale of a property, usually in a foreclosure.
For example: Hypothetical: a buyer makes an offer on a property sold under court order and learns the sale needs court approval. (Illustration only, not a real deal.)
Official source: Law and Equity Act (BC Laws)
Example only, not a real client. Say a lender has the court’s permission to sell a property after a default. It has conduct of sale, meaning it runs the sale process under court supervision.
What I’d tell a friend
Buying through a court-supervised sale means different rules. Get legal advice before you offer.
Why it matters to you
Whoever has it controls the sale process when a property is b...your numbers, or getting the registration and election steps wrong, can be expensive.
How to use it in your deal
Buyers should expect court-approved sales to be "as is", with little information from the seller, and with offers subject to court approval. Other bidders can show up at the court hearing with higher offers, so your accepted offer isn't secure until the order is made. Do due diligence early and be ready to close quickly.
Owners facing foreclosure should get legal advice promptly; there's usually a redemption period. Tenants in a property under foreclosure should keep paying rent and get legal advice about their lease; whether a lender is bound depends on when the lease was signed and registered compared with the mortgage, and on any subordination, non-disturbance and attornment agreement (SNDA).
Lenders with conduct of sale must try to get a fair price, usually by listing with a licensee and getting appraisals, so the court can see the market was tested. Subjects in court sales tend to be short, so line up financing and inspections before you offer. Bring your lawyer to the approval hearing or have them watch for competing bids, since you may get a chance to raise your price.
Mistakes I see
Assuming an accepted offer is final. Skipping due diligence. Owners ignoring court deadlines.
In BC and Vancouver
BC Supreme Court Civil Rules govern foreclosure and conduct of sale. Court decisions are on CanLII.
Official sources: CanLII (court decisions)
What it means
Conduct of sale is when a court allows a party, often a lender, to manage the sale of a property.
Offers are usually subject to court approval.
What to know
Other buyers may bid at the approval hearing.
Get a BC lawyer’s advice on the process, and expect few warranties from the seller.
Do your due diligence before the hearing, since time may be short.
Questions to ask before you sign
- Has the court granted conduct of sale?
- What's the approval process?
- Can others outbid me?
- What information is available?
Keep reading
Related terms: Distress, Certificate of pending litigation (CPL)
Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.
Back to the A–Z index · common questions · tactics to watch for · the shorter glossary
General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.