Foreclosure, Property Disputes and Other Common Situations
How to Get Money Out of Court in Alberta
In Alberta, when money is paid into court, common questions some people ask are: Why was the money paid to the court rather than given directly to me? And how do I get my money out of court?
Money may be paid into court in Alberta for several reasons. It can happen when money is deposited as security in connection with a legal dispute, when there are competing claims to a property or sale proceeds, or when a court requires funds to be held. These specific situations can arise in foreclosure proceedings, ownership disputes, partition and sale matters, matrimonial or family property disputes, or builder’s lien claims.
In Alberta, the Court of King’s Bench provides a specific form, “Money paid into Court”, as well as forms and resources relating to foreclosure proceedings.
Understanding why money has been paid into Court is the first step in determining how it may eventually be released to you. Below are the most common reasons someone would need to apply to the Court to have money released.
Foreclosure and Surplus Sale Proceeds
The situation most frequently involving money being paid into the courts is foreclosure. Foreclosure takes place when a borrower fails to keep up with their mortgage. The lender then proceeds with the necessary legal action to realize its security interest in the property.
A surplus from a judicial sale is the extra money left over after mortgage debt, legal costs, commission, and all other legitimate claims have been paid. If the property is listed for sale and sells for more than what is owed during a foreclosure or judicial sale, the remaining funds are paid into court rather than given directly to the owner. The previous owner must file a court application to demonstrate legal entitlement to the surplus.
Partition and Sale of Property
When a property is jointly owned, money can also become tied up following a partition and sale. This happens when two or more people own a property together but cannot agree what should happen to it. One party may seek a court-ordered sale. Arguments can arise if one owner contributed more toward the down payment, mortgage, or renovations. The sale of the property does not necessarily resolve the dispute. The court must determine who is entitled to what portion of the proceeds. Once the order is granted, the funds will be distributed according to that order.
Division Of Matrimonial Or Family Property
When a marriage breaks down, or an adult interdependent relationship ends, money being held pending resolution of a property dispute. The home may be jointly owned, and the sale could generate substantial equity, but the parties may disagree on how to divide the sale proceeds. One spouse may claim a particular share based on their interest in the property, while the other may raise claims relating to contributions, agreements or other property interests.
Dispute proceeds may need to remain protected until either party comes to an agreement or the court determines their rights. An agreement, judgement or court order may therefore be required before any funds are released.
Builders’ Liens
When a contractor, subcontractor, supplier, or any other person claims they have not been paid for their work or materials provided in connection with an improvement to real property. Money may be paid into court to address or remove the lien, but this does not necessarily remove or resolve the dispute. The parties may still argue about the liens’ validity, the amount owed, or the work performed and who is entitled to the funds. If multiple parties are involved, the court may have to decide how the funds should be distributed. Any interested party seeking the release of lien-related funds should be aware of it and understand the underlying claim and whether there are any interests before applying.
Ownership Disputes
Money may also be paid into court where there is a dispute over ownership or entitlement to a property. For example, if a property is sold and two people claim an interest in the proceeds, one person may rely on the registered ownership on title, while another may claim a beneficial interest based on the financial contributions, an agreement, or other circumstances.
The court can ultimately decide who has an interest in the funds and direct how they should be distributed by making an order. These disputes can become complicated when multiple people, estates, corporations, trusts, or creditors are involved, and for this reason, it is important to identify everyone who may have a claim to the funds.
In Conclusion
If you believe you are entitled to money held in an Alberta court, the first step is to determine why the money was paid into court and the legal process to have the funds paid to you.
In Alberta, money can become tied up in the court system for many reasons. Foreclosure and surplus sale proceeds, partition and sale proceedings, matrimonial or family property disputes, builders’ liens, and ownership disputes can all result in funds being paid into court. Money paid in court and held by the court does not indicate that the court has already decided who owns it. The funds may be held until entitlement is established or an appropriate court order is attained. Obtaining legal advice can help ensure that a suitable procedure is followed.
At Kahane Law Office, our litigation lawyers have the experience and knowledge to have funds paid into Court released to you.
The information contained in this article is provided solely for general informational purposes and does not constitute specific legal or professional advice.