Can a lender start power of sale if I am only a few payments behind in Ontario?
A lender cannot give a notice of exercising a power of sale until your default has continued for at least 15 days, so the timing is measured in days of default rather than a set number of payments. The sale itself cannot be made until at least 35 days after the notice is given. Your mortgage terms decide what counts as default and whether the lender has a power of sale clause.
If your mortgage has no power of sale clause, the statutory power to sell arises only after three months' default, and no sale may be made until 45 days' written notice has been given, which may be given any time after 15 days' default; this does not apply if the mortgage declares that Part II of the Mortgages Act does not apply.
Contact your lender as soon as you can. Banks may offer relief such as waiving fees or extending the amortization. Before a sale, if your whole debt has been accelerated, you can generally be relieved of the default by paying the arrears plus the lender's necessary expenses, and you can ask in writing for a statement of the arrears and expenses. Get legal advice early.
Key takeaways
- The Mortgages Act measures timing in days of default, with at least 15 days before a notice of sale can be given.
- The sale cannot be made until at least 35 days after the notice is given.
- A mortgage without a power of sale clause follows a different path of three months' default and 45 days' written notice, unless the mortgage declares that Part II of the Mortgages Act does not apply.
- Contact your lender as soon as you can, because banks may offer relief measures such as extending the amortization.