Power of sale is the most common way mortgage lenders in Ontario recover a property after a borrower defaults. This guide explains how the power of sale process works in Ontario, the typical timeline, and what it means for both homeowners and buyers.
What is power of sale?
When a borrower falls behind on mortgage payments, most Ontario mortgages give the lender a contractual power of sale — the right to sell the property to recover the debt without a full court foreclosure. Ontario relies on power of sale far more than judicial foreclosure, which is one reason the process tends to move faster here.
The power of sale process and timeline
After a default continues for the period set out in the mortgage and Ontario’s Mortgages Act, the lender issues a Notice of Sale. The borrower then has a redemption period in which they can bring the mortgage up to date by paying the arrears and costs and stop the sale. If the borrower does not redeem, the lender markets and sells the property and must account to the borrower for any surplus left after the debt and selling costs are paid.
Power of sale vs foreclosure
In a power of sale the lender sells the property and returns any surplus to the borrower; in a foreclosure the lender takes title to the property itself. Power of sale is quicker and is the route used in the large majority of Ontario cases.
What it means for homeowners and buyers
Homeowners facing power of sale still have options — refinancing, private lending, or selling on their own terms — if they act before the sale closes. Buyers can sometimes acquire these properties below market value, but should do careful due diligence on condition, title, and timelines.
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