How long does a lender have to wait before a power of sale?
Power of sale is the Ontario route, and the statute sets out the minimum intervals. Knowing which clock is running matters, because a borrower keeps a statutory right to cure the default right up to the sale.
The short answer
There are two separate waiting periods in the Mortgages Act, not one. A notice cannot be given until the default has continued at least fifteen days, and the sale cannot be made for at least thirty-five days after the notice. Robin Patel, a REALTOR® in the Greater Toronto Area, works to those dates.
Written forOwners in the GTA who have fallen behind on mortgage payments and received or expect a notice, and buyers looking at a property listed under power of sale who want to understand the process behind it.
The short version
- Ontario lenders generally proceed by power of sale, and the Mortgages Act sets minimum intervals that must pass before a sale can be made.
- Notice of exercising the power of sale cannot be given until the default has continued for at least fifteen days.
- The sale cannot be made for at least thirty-five days after the notice has been given, so the two periods run one after the other.
- Despite any agreement to the contrary, a borrower may pay the amount due plus the expenses necessarily incurred and be relieved from the consequences of the default, at any time before sale under the mortgage.
- The notice must be in the prescribed form and must go to the persons the Act lists, including others shown on the register as having an interest.
There are two periods, not one
People usually talk about this as though there is a single countdown that starts when a payment is missed. The Mortgages Act sets two separate minimum intervals, and they run one after the other rather than together.
The first attaches to the notice. Where a mortgage confers a power of sale on a certain default, notice of exercising the power of sale shall not be given until the default has continued for at least fifteen days. The second attaches to the sale: the sale shall not be made for at least thirty-five days after the notice has been given.
The Mortgages Act sets two separate minimum intervals, and they run one after the other rather than together.
What the notice has to be, and who gets it
A mortgagee shall not exercise a power of sale unless a notice of exercising the power of sale, in the form prescribed by the regulations, has been given to the persons the Act lists. It is not a letter of the lender's own design.
The list reaches beyond the borrower. Where the property is registered under the Land Titles Act, notice goes to every person appearing by the parcel register and the index of executions to have an interest in the property, with an equivalent rule where the Registry Act applies. The Act also sets out how notice is given, by personal service or by registered mail to the usual or last known address, with alternatives where the mortgage itself specifies service or an address.
| Step | What the Act requires |
|---|---|
| Before notice | The default must have continued for at least fifteen days |
| The notice | In the form prescribed by the regulations, given by the mortgagee |
| Who receives it | The persons the Act lists, including those shown on the register as having an interest |
| How it is given | Personal service or registered mail to the usual or last known address, subject to what the mortgage provides |
| Before the sale | At least thirty-five days after the notice has been given |
| Meanwhile | No further proceeding or action to enforce until the stated time lapses, without a judge order |
The right that survives the notice
This is the provision worth knowing, and it is written to be hard to contract out of. Despite any agreement to the contrary, where a default has occurred and the whole principal and interest has become due under the terms of the mortgage, the borrower may pay the amount due under the mortgage and pay any expenses necessarily incurred by the mortgagee, and thereupon the borrower is relieved from the consequences of the default.
The timing branch matters as much as the right. It is available at any time before sale under the mortgage, or before the commencement of an action to enforce the mortgagee's rights. So receiving a notice is not the end of the road, and the question of whether a particular situation is still within those limits is one for a lawyer rather than for a guess.
What to do with the dates
If a notice has arrived, the first task is unglamorous: find the date it was given and keep the envelope and anything that shows how it came. Both statutory periods are measured against events, and the Act is specific about how notice may be given, so the record of what happened and when is the foundation of any advice.
Then get that advice quickly rather than at the end of the period. A borrower who intends to cure the default needs the amount due and the expenses necessarily incurred established, and a borrower who intends to sell instead has a different and shorter problem. Both are better with weeks than with days.
Written by
Robin PatelSalesperson · The Agency Toronto
Updated
Published
Read in your language
A machine translation, not Robin’s words. For anything that decides money, ask him in Gujarati or Hindi directly.
