A power of sale is a remedy a lender can use when a mortgage is in default. It lets the lender sell the property and apply the proceeds to what is owed, without first going to court for permission.

The right comes from two places. It can be written into the mortgage document itself, which is the usual case, and it also exists under Ontario's Mortgages Act. The two routes have different requirements, which is one reason this is a question for a lawyer rather than something to work out from an article.

The critical point, and the one most people get wrong: the lender is selling the property, not acquiring it. The lender's interest is in recovering what it is owed. It is required to account for the proceeds afterwards, and that accounting is governed by statute rather than by the lender's preference.

The phrase "sold under power of sale" on a listing means exactly that. The registered owner is still the owner at the point of sale. The sale is being conducted by the lender under the authority the mortgage and the statute give it.

Default. A mortgage goes into default when its terms are not met. That is usually missed payments, but a mortgage can also be in default for other reasons set out in the document, such as unpaid property taxes or a failure to insure.

A waiting period, then notice. A lender cannot send a notice of sale the moment a payment is missed. The Mortgages Act sets out minimum periods that must pass before notice can be given, and further periods that must pass after notice before the lender can proceed to sell.

Notice to others as well as to you. Notice generally has to go to parties with registered interests ranking behind the lender, not only to the borrower. A second mortgage holder, for example, has its own interest to protect.

Possession, then marketing and sale. The property is listed and sold in the ordinary market. Lenders are generally expected to act in good faith and take reasonable steps in conducting the sale.

Accounting. Proceeds are applied in the order the statute sets out, and any residue belongs to the borrower. Section five covers this.

Many homeowners read a notice of sale as a final outcome. It is not. The Mortgages Act provides a right to cure the default up to a point in the process, and that right exists despite anything in the mortgage that purports to take it away.

The feature of this that surprises people most is what curing actually requires. Broadly, it involves bringing the arrears up to date together with the lender's costs, rather than paying off the entire mortgage balance. A homeowner who assumed the only way out was finding the full balance may have been working with the wrong number.

There is also a mechanism to require the lender to provide a written statement of what is owed to bring the mortgage into good standing, with consequences for a lender that does not respond.

Three cautions, all of them serious. This right runs only up to a point in the timeline, and it is not available indefinitely. The amounts, the deadline and whether the right applies in a given case are legal questions that depend on the documents. And nothing above should be taken as a reason to wait and see. Time is the variable you have least of, and the options narrow as it passes. If a notice has arrived, see a lawyer now rather than at the end of the period.

Which of these is realistic depends entirely on the numbers, the documents and the timeline, none of which a general article can see. Each one is a conversation with a professional who can.

Talk to the lender early. Lenders have internal processes for borrowers in difficulty, and the time to use them is before a default has matured rather than after. Avoiding the lender's calls is the most common and most costly instinct in this entire situation.

Curing the default. Covered in section four. A lawyer can tell you whether the right is available, what it would require and by when.

Refinancing or restructuring. Whether this is possible depends on your circumstances and on what a lender will do. A mortgage broker who works with these situations is the person to ask, and the answer may be no, which is still worth knowing early.

Selling the property yourself. Where there is equity, an ordinary sale run properly, with time to market, photograph and reach the right buyers, is a different exercise from a sale conducted under pressure. This is the option where a real estate professional is genuinely useful, and the honest version includes telling you when there is not enough time or equity for it to work.

Insolvency advice. Where the difficulty is broader than one mortgage, a Licensed Insolvency Trustee is the regulated professional for that conversation, and it is a free initial conversation in most cases.

One warning. Financial difficulty attracts people offering fast solutions, and some of those arrangements are far more costly than they appear or transfer away interests in your property. Do not sign anything presented as a rescue without your own lawyer reading it first. Not the other side's lawyer. Yours.

These properties are listed and sold in the ordinary market. What differs is who is selling, what they will tell you and what they will agree to.

The seller has never lived there. A lender conducting a sale has no knowledge of the property's history: no renovation dates, no permit history, no sense of whether the basement has ever taken water. Information you would normally get from a seller simply does not exist in this transaction.

Expect the agreement to be heavily amended. Lender schedules commonly remove representations and warranties and sell the property in its existing condition. Your lawyer needs to read the schedule in full, before you sign, and explain exactly which protections you are giving up.

Condition is unknown and sometimes poor. A home occupied through a period of financial difficulty may have had deferred maintenance. Fixtures and appliances may be gone. An inspection matters more here than in almost any other purchase, not less.

Occupancy and possession. Whether the property is vacant on closing is a real question rather than an assumption, and it is one for your lawyer.

Title, liens and arrears. Other registered interests, outstanding property taxes, utility arrears and condominium common expense arrears all need to be examined. This is standard conveyancing work, and it is where a lawyer earns the fee on this kind of purchase.

The law is provincial and applies the same way across Ontario. What differs locally is the valuation question, and in York Region that question is unusually sensitive to detail.

Where school boundaries drive demand, the effect is street-level rather than neighbourhood-level, and comparing a property against sales from the other side of a boundary line will mislead you in both directions. That matters to a homeowner working out whether there is equity worth protecting, and it matters to a buyer deciding what to offer.

Condominiums bring their own layer. Common expense arrears, the status certificate and the corporation's financial position all need to be examined, and a unit that has been through a period of non-payment may carry arrears. Our Richmond Hill condo buyer guide covers what the status certificate should be read for.

For a property with a basement apartment, whether that unit is legal is a separate question that affects value, financing and insurance, and it is not answered by the fact that it exists and has been rented. Our guide to legal basement apartments in York Region sets out what has to be true.

1. Not opening the mail. The documents contain the dates everything else depends on. Every option narrows while they sit unopened.

2. Assuming nothing can be done. A right to cure the default exists up to a point, and it generally involves the arrears and costs rather than the full balance. Assuming otherwise closes a door that may still be open.

3. Signing a rescue arrangement without independent legal advice. Some of these cost far more than they appear to, or move interests in the property. Your own lawyer reads it first.

4. Being indifferent to the sale price. The residue after everything is paid belongs to the borrower, and a shortfall is its own problem. What the property sells for is not someone else's business.

5. Assuming the label means a discount. Price it from matched comparables and the cost of the work, exactly as you would any other property.

6. Skipping the inspection because the schedule discourages conditions. This is the purchase where the least is known about the property. Understand what you are giving up before you give it up, and note that waiving financing is a separate and large risk of its own.

7. Not having the lender's schedule read line by line. The amendments are the transaction. Everything that is different about buying this way is in that document.