What happens to my purchase if a court later sets aside a power of sale I already closed on?

This is one of the more serious risks associated with a power of sale purchase, though it is far from the most common outcome, especially where the process was properly conducted and the buyer purchased in good faith without notice of any problem. If a court later finds that the power of sale was improperly carried out and sets it aside, what happens next depends heavily on the specific facts - including whether you registered your interest under the Land Titles system, which generally offers stronger protection to a good-faith purchaser, and what the court considers a fair outcome for everyone affected.

Rather than automatically unwinding a completed transaction, courts often focus on compensating the party who was wronged, particularly where doing so is more practical and less disruptive than displacing an innocent buyer who paid full value in good faith. There is no guaranteed outcome either way, and this is precisely the kind of risk that careful legal review of the notice and process before closing, along with title insurance, is meant to reduce.

Discuss this risk specifically with your lawyer before closing, and understand that title insurance and diligence reduce, but cannot entirely remove, this exposure.