Background
In Alberta, it is common for mortgage agreements to include clauses waiving statutory protections under Sections 49 and 52 of the Expropriation Act. These waivers can have significant financial and legal consequences for borrowers, especially when land is expropriated for public purposes.
What Do Sections 49 and 52 Provide?
Section 49 ensures that compensation for security interests (like mortgages) is based on the market value of the land. If the debt owed exceeds the land's value, the lender is typically limited to the market value - unless there is additional collateral, in which case the Land and Property Rights Tribunal determines how any shortfall is handled.
Section 52 provides for "disturbance compensation" requiring the expropriating authority to pay three months' interest to the security holder, proportionate to the expropriated land's share of the total security interest.
