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Power of sale is a legal remedy that lets a lender sell a property after default without taking ownership of it first, under authority granted directly in the mortgage document rather than through a full court foreclosure action; it is the typical remedy in provinces such as Ontario.
Under power of sale, the lender’s goal is simply to sell the property and recover what is owed — the lender does not become the owner. Provincial law sets out required notice periods and procedural steps before a sale can proceed, giving the borrower a window to cure the arrears or otherwise resolve the default before the property is sold.
If the sale proceeds and doesn’t cover the full amount owing plus costs, the lender may pursue the borrower for the shortfall, depending on the province. Power of sale is generally faster and less costly than judicial foreclosure, which is one reason it’s the more common remedy where provincial law permits it.
Common in Ontario: power of sale, rather than judicial foreclosure, is the typical remedy used by Ontario lenders after mortgage default.
Also used in New Brunswick and PEI: these provinces likewise commonly rely on a power-of-sale-style process rather than court-supervised foreclosure.
Notice periods are set by provincial law: borrowers are entitled to a statutory notice period before a sale can proceed, giving time to bring the mortgage current.
Different from foreclosure elsewhere: provinces such as British Columbia and Alberta more commonly use a judicial foreclosure process instead — the remedy available depends on where the property is located.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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