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.
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
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)