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

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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