Power of Sale in Ontario: What Homeowners and Lenders Need to Know

When mortgage payments stop, legal action begins. In Ontario, Power of Sale is the most common remedy used by lenders to recover debt—and it can move faster than you think. Unlike foreclosure, which requires court approval and allows the lender to take ownership of the property, Power of Sale allows the lender to sell the home without a court order. The borrower still holds title—but only until the lender completes the sale and recovers what they’re owed.

How Does It Work?

Under Section 24 of Ontario’s Mortgages Act, a lender can initiate a Power of Sale if:

• The borrower is in default (typically after missing 3 or more payments)
• Proper notice is served under Section 32, giving the borrower at least 35 days to pay
• The lender follows strict legal steps before listing or selling the property

🛡️ If the borrower does not cure the default in time, the lender can proceed with selling the property—often through real estate agents—without setting foot in court.

2. Key Risks for Borrowers

• Loss of Home: You may lose your property much faster than expected
• Deficiency Judgment: If the sale proceeds don’t cover the full debt, you may still owe money
• Credit Damage: Power of Sale can significantly affect your credit rating

3. Why You Need Legal Advice Early

Whether you're a homeowner facing default or a lender initiating Power of Sale, legal advice can protect your rights. A lawyer can help:

• Verify notice requirements and timelines
• Ensure the sale is conducted fairly
• Assess risks of litigation or borrower challenges
• Negotiate repayment or sale options

Final Thoughts

Power of Sale is fast, powerful, and unforgiving. It’s designed to favour lenders—but the law still imposes strict duties of good faith, fair market value, and proper procedure. If you’re involved in a mortgage dispute or nearing default, act early.

At ME Law, we help both borrowers and lenders navigate Power of Sale actions with clarity and urgency.

🛑 Don’t wait until the sign goes up on your lawn. 📞 Reach out today if you need guidance on a mortgage enforcement matter.