Bad info spreads fast, especially when youโre stressed and behind on payments. If you understand how Ontarioโs power of sale works, and what your rights are, you can make smart moves, fast, and keep control of your equity.
What Is a Power of Sale?
In Ontario, power of sale is the most common legal remedy a lender uses after a borrower defaults on a mortgage. Itโs typically faster and less expensive than foreclosure because the lender doesnโt need court approval to start.
Default usually means missed mortgage payments, but it can also include breaching other mortgage covenants, such as:
-
Not paying property taxes
-
Letting insurance lapse
-
Willful damage or illegal use of the property
What Happens After a Default? (Ontario Timeline)
Day 15 after default: The lender can deliver a Notice of Sale.
Redemption Period (generally ~35 days): You can stop the process by bringing the mortgage back into good standing (arrears + costs/fees/interest).
If nothing is done, the lender can advance enforcement, listing the property for sale and, if necessary, seeking possession to complete the sale and vacate occupants.
Total timeline often runs 3โ6 months, but delays happen (legal disputes, slow market, etc.).
Myth #1: โYou Have No Rights During a Power of Saleโ
Reality: You have rights, and they matter.
-
Right to Redeem: You can reinstate the mortgage by paying arrears, accrued interest, and lender costs any time before the sale closes.
-
Right to Surplus: After the sale, any money left once everyone in priority is paid (lender, legal fees, taxes, etc.) belongs to you.
-
Right to Proper Notice: The lender must send a Notice of Sale after default (commonly 15 days).
-
Right to Fair Market Value: The property must be sold for fair market value, usually supported by an appraisal/BPO. If the home is undervalued, you can challenge it.
-
Right to Counsel: You may obtain legal representation at any stage.
-
Right to Sell: You can sell the property yourself during the process, pay whatโs owed, and keep your equity.
Myth #2: โThe Lender Wants to Take Your Homeโ
Reality: Lenders want performing loans, not houses.
Selling real estate is costly and risky for the lender:
-
They face realtor commissions, legal fees, carrying costs, and delays.
-
If the sale price isnโt enough, they may pursue a deficiency (e.g., via a Writ of Execution).
Because liquidation is a headache, many lenders will consider payment plans, repayment schedules, or refinancing options to get you back on track.
Myth #3: โYou Can Ignore the Process Until the Last Minuteโ
Reality: Waiting is the fastest way to lose leverage.
-
The process can begin 15 days after default.
-
After the ~35โ40 day redemption window (40 if the home is occupied by spouses), the file can escalate (e.g., Statement of Claim in some legal paths) and move toward possession and sale.
-
Once the momentum builds, legal costs compound, and your options get narrower.
Bottom line: Open the mail. Answer the calls. Act early.
Myth #4: โPower of Sale Means Immediate Evictionโ
Reality: Itโs a process, not an instant lockout.
You still own the property until itโs sold. During the Redemption Period, you can:
-
Pay arrears + interest + lenderโs legal/admin fees
-
Reinstate or refinance
-
Sell the property yourself and protect your equity
If no action is taken, the lender can move toward possession to complete the sale and schedule eviction, but that isnโt immediate.
How to Stop a Power of Sale (Fastest Plays)
1) Reinstate/Bring Current
Pay arrears, interest, and lender costs to reset the mortgage to good standing.
2) Refinance
-
Traditional refinance: If you still qualify, this clears arrears and legal costs.
-
Private/second mortgage: A short-term, interest-only solution that funds quickly (often 1-year term). Itโs a stopgap to halt enforcement and buy time to stabilize, repair credit, or sell on your terms.
3) Sell Proactively
List and sell before the lender does. You control timing and presentation, and youโll typically net more after paying whatโs owed.
Tip: Private financing relies heavily on equity, not just credit and income. Approval is often faster than banks or credit unions with strict underwriting.
Seeking Professional Help
In a power of sale, speed and accuracy matter. Work with professionals who:
-
Explain every step, from default to sale mechanics
-
Provide clear options (reinstatement, refinance, private second, or sale)
-
Offer access to legal resources tailored to your situation
A home equity loan can turn your propertyโs value into opportunity, helping you move forward with confidence.
Ready to access your homeโs equity? Letโs find the best solution for you.
๐ 1-866-702-9394
๐ www.burkefinancial.ca
