Judicial Sale vs. Power of Sale

The principal differences between power of sale and judicial sale are:

The extent of court involvement. There is virtually no court involvement in the power of sale provinces, while in judicial sale provinces, the court is extensively involved: Ordering that the property be sold; confirming the sale procedure after it occurs, and; Hearing any application for a deficiency judgment.

The way in which the process is started. In power of sale provinces, sending a notice to the borrower and current owner of the property starts the process. In judicial sale provinces, a lawsuit against the borrower, and others who may be liable, starts the process.

The way in which a deficiency judgment is sought. In power of sale provinces, a lender seeking a deficiency judgment must start an action against the borrower after the property has been sold. In judicial sale provinces, the deficiency judgment action is started as part of the main action, or suing, of the borrower.
Foreclosure proceedings in Ontario are quite speedy, as the proceedings are usually laid out in the mortgage documents. Power of sale was initially developed in Ontario by lenders who wanted a faster way to dispose of property and recover debt. As a result, they began to include power of sale provisions in mortgages that would allow them to dispose of property under the borrower’s default and without having to resort to the courts. Power of sale is now part of the Ontario Mortgages Act.

The Mortgages Act refers to two types of power of sale: Contractual and statutory. Contractual power of sale is when the mortgage documents have included power of sale provisions. Statutory power of sale is when the mortgage documents have not included power of sale provisions. While statutory power of sale is very rare, the lender can still exercise power of sale as long as the borrower has defaulted for three months or more.

Both types of power of sale are started by giving a notice to the borrower after 15 days of default. The notice must be given to anyone having an interest in the property, including subsequent encumbrances, statutory lien holders, or people who have advised the lender in writing, that they have an interest in the property.

Power of Sale Alert Service
we provide this service to advise the interested buyers in timely fashion the availability of properties that are being sold under this category. When decided to use this service, you will be advised by email the earliest day when such properties are made public. All such email messages do contain most of the information about such properties to help you decide as to whether or not you like to find out more about and make an acquisition attempt.

Once you find a property that suits your needs, I will be more than happy to provide you all possible and related information to put you in best position to make an educated decision.  I guarantee your experience will be a pleasant one!

Power of Sale homes are properties which have been taken over by a bank for non-payment of the mortgage. Distress sales resulting from bank foreclosure or power of sale provisions, often represent a great way to get a fantastic deal on a home. It’s not easy for the average home buyer to find these deals, because you have to keep scouring the papers and they are not identifiable on the online listing services.

If you’re the type of person who recognizes what a great deal some of these properties could represent, you will be interested to know about Power of Sale properties and details

to receive privileged confidential links to one of the Most Comprehensive Listings of Power of Sales, Bank Foreclosures in Toronto and surrounding areas of the GTA.

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(The comments contained on this site are for information purposes only and do not constitute legal advice.)

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Vijay Gandhi,
Sales Representative- REALTOR®,
RE/MAX Dynasty Realty Inc. Brokerage*
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