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Power of Sale

Learn how power of sale works in Canadian real estate, how it differs from foreclosure, and what borrowers and investors need to know about the process.

Power of Sale

May 22, 2025


What is Power of Sale?

Power of sale is a legal process used by lenders in several Canadian provinces to recover mortgage debt by selling a defaulting borrower’s property without going through the court system.

Why Power of Sale Matters in Real Estate

Common in Ontario and Nova Scotia, power of sale allows lenders to act more quickly than foreclosure. Once a borrower is in default, the lender can issue notice and, after a waiting period, sell the home to recover the debt.

Key features of power of sale:
  • Property is sold by the lender, not the court
  • Borrower may still owe any shortfall after the sale
  • Any surplus funds after debt and costs are paid go to the borrower

This process protects lender rights while offering transparency and oversight. Homeowners in power of sale should seek legal counsel promptly.

Understanding power of sale helps homeowners, investors, and agents navigate distressed property sales and lender recovery procedures.

Example of Power of Sale in Action

After a borrower defaults, their lender exercises power of sale, selling the property to recover the remaining loan balance and legal fees.

Key Takeaways

  • Enables lender to sell defaulted property.
  • Faster and less costly than foreclosure.
  • Common in Ontario and Nova Scotia.
  • Borrower may retain surplus after sale.
  • Governed by provincial statutes.

Related Terms

  • Foreclosure
  • Default
  • Mortgage Arrears
  • Distressed Property
  • Judicial Sale

Additional Terms

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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