Why doesn't a seller disclosure statement apply when I buy a property through power of sale in Ontario?

The straightforward reason is that the party selling is the mortgage lender exercising its security, not someone who has actually lived in or managed the property. A lender in this position generally has no personal knowledge of the roof's age, whether the basement has flooded, or how appliances have performed over the years, so it is not in a position to make meaningful representations about the property's condition even if it wanted to. As a result, these sales are structured "as is," with representations and warranties limited or excluded entirely in the purchase documents.

It is also worth knowing that Ontario does not have a general legal requirement for sellers to provide a formal disclosure statement in an ordinary resale purchase either - such statements, where used, are typically a discretionary practice rather than a legal mandate. What changes in a power of sale is less about a disclosure requirement disappearing and more about there being no informed seller in the first place to speak to the property's history at all.

Treat a power of sale purchase as one where you must independently verify everything you would normally ask a seller about directly.