Facing a Power of Sale? What to Do Next
General information only, not legal or financial advice. Every power of sale is different. Before you buy, sell or sign anything, get independent legal advice from a real estate lawyer who acts for you.
If you are behind on your mortgage, or a notice of sale has arrived, it can feel like everything is out of your hands. It usually is not. You have time, you have rights, and there is free help. This page sets out what to do, in order.
How the timeline works
Under Ontario's Mortgages Act, for most mortgages (those that include a power of sale clause), a lender can only send a notice of sale once a payment has been missed for at least 15 days. The sale cannot be completed until at least 35 days after that notice. If your mortgage has no such clause, the process is slower and the notice period is longer. You may still be able to bring the mortgage back into good standing before a sale is completed. A lawyer can tell you exactly where you stand.
What to do now
1. Open everything and note the dates
Read every letter from your lender. Write down the date on the notice and any amounts it lists. Those dates decide how much time you have.
2. Call your lender early
Many lenders would rather work something out than sell. Ask what options they have: a payment plan, extending the loan's length, or a short pause on payments. The earlier you call, the more room there is.
3. Get legal advice
A real estate lawyer can check whether the notice was done properly and explain your options. The Law Society Referral Service gives a free first consultation, and Legal Aid Ontario may help if your income qualifies (links below).
4. Look at your whole budget
A non-profit credit counsellor can help you see what you can realistically pay. If other debts are the real problem, a licensed insolvency trustee can explain a consumer proposal, which can reduce what you owe.
5. Know that selling yourself is an option
If keeping the home is not realistic, selling it yourself before the lender does may give you more say over the price, the timing and your move, though no one can promise a better result. Talk to a lawyer first, and to an agent you trust.
If you want to talk it through, Kai Min can explain what selling would involve. Send a message with the “Ask Kai” form at the bottom of this page, or see the contact page. There is no pressure to list.
Where to get help
- Law Society Referral Service: The Law Society of Ontario's referral service. It connects you with a lawyer or paralegal for a free consultation of up to 30 minutes.
- Legal Aid Ontario: Free or low-cost legal help if your income qualifies.
- Financial Consumer Agency of Canada: paying your mortgage in financial difficulty: What the federal regulator expects banks to offer homeowners who are struggling to keep up with payments.
- Credit Counselling Canada: Finds a non-profit credit counsellor near you to help with a budget and your debts.
- Licensed Insolvency Trustees (Office of the Superintendent of Bankruptcy): The federal list of licensed trustees. Only a Licensed Insolvency Trustee can set up a consumer proposal or a bankruptcy.
- Ontario's Mortgages Act: The law that sets the power of sale notice rules.
- 211 Ontario: Free, confidential help finding local community, housing and financial services. Call 2-1-1 or visit the website.
Buying rather than selling? Read the power of sale buyer's guide.