TRENDING: Hullmark To Manage Redevelopment Of Jane Finch Mall

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

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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