At times messy and complicated, court-ordered sales happen when a property is sold pursuant to a court order. These sales typically occur in the context of foreclosure and family law proceedings, by interested parties holding a minimum 50 per cent interest in the property pursuant to the Partition of Property Act,¹ or by petition of a judgment creditor under the Court Order Enforcement Act.² This article focuses on the most common situation in which a court may order a sale – foreclosure proceedings.

Foreclosure proceedings are a judicial process whereby a mortgagee or lender seeks ownership over a property where the owner has defaulted or failed to meet their loan obligations. Foreclosure is commenced by way of petition supported by affidavits setting out the amount owing, the lender's efforts to collect the debt, and any demands issued to the debtor. The petition will also often seek a Certificate of Pending Litigation over the property.

Properties sold under court order are sold “as-is, where-is,” meaning no guarantees or warranties are made. REALTORS® should inform themselves of the nuanced processes involved in these types of sales, as there are additional steps required of a REALTOR^® acting either for the seller or buyer.

Authority, Scope, and Court Process for Court-Ordered Sales

Through the foreclosure proceeding, a lender may apply under Rule 13-5 of the Supreme Court Civil Rules³ (SCCR Rules) for an order granting it “conduct of sale” to sell the property. Rule 13-5(1) grants the court discretion to order the sale of a property where it appears necessary or expedient to do so. Rule 13-5 confers on the court a “broad and sweeping discretion” to determine whether a sale of a property is necessary or expedient.⁴

On application, Rule 13-5(4) authorizes the court to provide direction for the purpose of effecting a sale under court order, including:

Assuming the court grants the petitioner's application for conduct of sale, the petitioner is legally entitled to sell the property in accordance with the terms of the order (the Approved Seller). Often, the Approved Seller will then enter into a Multiple Listing Contract with a real estate professional to sell the property. By doing so, the Approved Seller becomes the listing REALTOR®’s client and the party authorized to instruct the REALTOR^® on the sale of the property. It is incumbent on the listing REALTOR^® to obtain a copy of the court order to ensure compliance with all terms and specifically, to confirm that their client has been granted conduct of sale. Additionally, the court order may include terms relevant to the REALTOR®, including direction on marketing and inspections, and the amount of commission payable. The order will almost always require the sale of the property to be subject to the approval of the court.

After an offer is accepted (the Original Offer) and subjects are removed, the Approved Seller's lawyer will apply to the court for a hearing to approve the sale. This hearing is public, and any interested parties may attend. If an interested party wishes to compete with the Original Offer, they may submit a sealed bid to the Approved Seller's lawyer on the morning of the sale hearing. As of March 3, 2025, the process for submitting sealed bids is governed by Supreme Court Practice Direction 66 (PD-66).⁵ PD-66 no longer permits sealed bids to be collected prior to the sale hearing. Rather, the Supreme Court has gone back to an in-person approach and requires sealed bids to be collected on the day of the sale hearing.

Pursuant to PD-66, an interested buyer must now submit a competing offer in person no later than 9:45 am on the day of the sale hearing. The competing offer must be accompanied by a Schedule A, which incorporates and forms part of the offer. The Schedule A is provided by the Approved Seller in the foreclosure context and often overrides the terms of a sales contract. The Schedule A is designed to protect the lender and often includes terms confirming the property is sold "as-is, where-is" and that the lender is not responsible for any warranties or repairs. Along with the Schedule A, the competing offer must include a copy, but not the original, of the proof of deposit. Any competing offers must be condition-free, indicate the purchase is "as-is, where-is," and have the correct legal name of the purchaser(s). It is the responsibility of the listing REALTOR^® to ensure they have collected all sealed bids and provided them to the Approved Seller's counsel no later than 9:45 am on the day of the sale hearing. After sealed bids are collected by the listing REALTOR®, the prospective purchaser may choose to revise the Original Offer. However, this must be done by 9:45 am on the day of the sale hearing. Per PD-66, it remains with the discretion of the presiding judge or associate judge whether to consider sealed bids provided after 9:45 am and a REALTOR® should advise their client of this fact.

Once all offers are in, counsel will provide its position on the best offer. However, it is ultimately up to the court's discretion to approve the sale. The accepted offer will often be the highest bid; however, there are other factors the court may deem more favourable to the Approved Seller. These may include a shorter closing period or higher deposit. It is important to note that the party whose offer was originally accepted may not ultimately end up being the accepted buyer. As a REALTOR® for the buyer, it is important to inform your client of this risk prior to the sale hearing.

Disclosure Obligations

Once the court approves the sale, it is final. There is no backing out of the deal, and the Home Buyer Rescission Period does not apply to court-ordered sales. The successful buyer, if they haven't already, will be required to sign the Schedule A provided by the Approved Seller. Along with terms confirming the property is purchased "as-is, where-is," the Schedule A may contain limiting language such as:

“The purchasers expressly agree that neither the seller nor its agents or representatives have any liability, responsibility, duty or obligation to disclose to the purchasers any information or knowledge that they have with respect to the condition of the lands and premises or any latent or patent defects thereto.”⁶

BC Financial Services Authority (BCFSA) has issued a practice resource⁷ reminding REALTORS^® that despite clauses contained in a Schedule A that purport to limit a REALTOR®'s obligation to make certain disclosures, such as the one noted above, REALTORS^® cannot contract out of their obligation to disclose known latent defects as required under Section 59 of the Real Estate Services Rules.⁸ A REALTOR^® should advise their clients of their disclosure obligations. If a client nonetheless instructs a REALTOR^® not to disclose known latent defects, BCFSA advises that the REALTOR^® must withdraw and cease acting for that client.

Tips and Considerations

Navigating the purchase and sale of court-ordered sales requires careful attention to the specific processes and requirements set by the SCCR Rules. Although court-ordered sales do not happen too often, REALTORS^® involved in such transactions, either on the seller’s or buyer's side, should involve their managing brokers early on to ensure they are following proper protocol and complying with their professional obligations. Below are a few takeaways a REALTOR^® should keep in mind when listing a property subject to a court-ordered sale:

• obtain the court order granting conduct of sale to confirm who your client is;
• confirm all offers comply with the terms of the court order; i.e., confirm offers contain a subject requiring court approval of sale;
• recognize your listing with the Approved Seller may be voided at the discretion of the court, at any time;
• remember your obligations to collect sealed bids and provide them to the Approved Seller's lawyer no later than 9:45 am on the day of the sale hearing;
• familiarize yourself with the applicable Schedule A;
• remember your obligations to disclose known material latent defects under Section 59 of the Real Estate Services Rules prior to a sales contract being entered into;
• you must withdraw and cease acting for a seller if they instruct you not to make disclosure, as required under Section 59 of the Real Estate Services Rules;
• remember sales orders are final, and it is costly and difficult to amend a sales order once pronounced; and
• recommend that your client seek independent legal advice with respect to terms and conditions in the sales contract and Schedule A.

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	1.	Partition of Property Act, RSBC 1996, c 347.
	2.	Court Order Enforcement Act, RSBC 1996, c 78.
	3.	Supreme Court Civil Rules, BC Reg 168/2009.
	4.	Moody Estate, 2008 BCSC 786, at para. 19.
	5.	BC Supreme Court Practice Direction 66.
	6.	BCFSA Duties of Disclosure under Court-Ordered Sales, May 1, 2021.
	7.	Ibid.
	8.	Real Estate Services Rules BC Reg 209/2021; see also, BCFSA Material Latent Defects Guidelines.

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