- Where a mortgage has a power of sale, notice cannot be given until default has lasted at least 15 days and the sale cannot happen until at least 35 days after notice.
- You can generally stop enforcement of the acceleration clause by paying the arrears and the lender's necessary expenses, but not after the sale has closed.
- A writ of possession may be issued only with leave of the court.
Getting a notice of sale is frightening, and the first question is usually how long you have before you must leave. There is no single move-out date that fits everyone, because it depends on your mortgage, the notice and what happens after the sale.
This article walks through the general timeline in Ontario and the points that can change it.
The notice periods
Where a mortgage contains a power of sale, the lender cannot give notice of exercising the power of sale until the default has continued for at least 15 days, and cannot sell until at least 35 days after the notice is given. The 35-day notice of sale must go to every person having an interest in the mortgaged property.
The notice must be in Form 1, Notice of Sale under Mortgage, prescribed by O. Reg. 814/21. Service of the notice is governed by s. 33(1) of the Mortgages Act. A notice sent in the manner the statute prescribes is not defective just because the intended recipient never actually received it. Whether a particular notice was served properly depends on the facts, so it is worth confirming with a lawyer.
| Situation | Timing |
|---|---|
| Mortgage has a power of sale clause | Notice after 15 days of default; sale at least 35 days after notice |
| No power of sale clause | Statutory power applies after three months' default, with 45 days' notice |
Possession is a separate step from the sale
Once a notice of sale has been given, the lender cannot start any further proceeding or action to enforce the mortgage until the time stated in the notice has passed, unless a Superior Court judge permits it. A lender's possession of the property could not be lawful until after the notice of sale period expired.
There is a catch. Unless the mortgage itself requires notice, a lender does not have to give notice before taking possession once it is otherwise entitled to possession. Where court action is needed, a writ of possession may be issued only with leave of the court. Read your mortgage and any court papers carefully, and do not assume you will get a separate warning.
Ways to stay longer or keep the home
A borrower in default can stop the lender from enforcing the acceleration clause by paying the amount due under the mortgage, meaning the arrears and not money that is only due later, plus the lender's necessary expenses. Once the power of sale closes, that right no longer applies and you are limited to a claim for damages against the lender.
You can give the lender written notice requiring a written statement of the arrears and expenses. The lender must answer within 15 days, and if it fails to do so without reasonable excuse, or gives an incomplete or incorrect answer, its enforcement rights are suspended until it complies.
- Ask the lender about relief options such as blend-and-extend, capitalizing missed payments or limited-time interest-only payments.
- Consider a sale-by-borrower plan, where you sell at fair market value and can usually stay up to 90 days.
- Federally regulated lenders are expected to give tailored relief to borrowers at risk of default on a principal residence, but this does not extend to provincially regulated and private lenders.
Spouses and tenants
A spouse with no ownership interest in the matrimonial home but with a right of possession has the same right of redemption or relief against forfeiture as the owner-spouse, and is entitled to the same notice of the lender's claim and its enforcement.
If you rent the home to someone, a lender that becomes mortgagee in possession, or gets title by foreclosure or power of sale, is deemed to be the landlord under an existing tenancy. On the lender's application, the Superior Court of Justice may vary or set aside a tenancy the borrower entered into in contemplation of or after default to discourage the lender from taking possession or to reduce the value of its interest, and the judge must consider the interests of both the tenant and the lender.
What to do next
- Find the notice of sale you received and keep it with your mortgage papers.
- Request a written statement of arrears and expenses from the lender.
- Contact the lender early to ask about relief or a sale-by-borrower plan.
- Do not ignore court papers; read them and get legal advice quickly.
- Start planning a move in case redemption is not possible.
Frequently asked questions
Do I have to leave when the 35 days end?
The 35 days is the earliest the sale can happen. Whether you must leave then depends on the sale closing, the buyer's rights and any court steps. A lawyer can read your documents and confirm.
Can the lender change the locks right away?
A lender's possession could not be lawful until after the notice of sale period expired. After that, unless the mortgage itself requires notice, a lender does not have to give notice before taking possession once it is otherwise entitled to it. Where court action is needed, a writ of possession may be issued only with leave of the court.
Can catching up on arrears stop the lender's acceleration clause?
A borrower in default can stop the lender from enforcing the acceleration clause by paying the arrears and the lender's necessary expenses. How this applies to your situation is worth confirming with a lawyer. Once the sale has closed, that right no longer applies.
Is there a way to control the sale myself?
A lender may offer a sale-by-borrower plan, in which you sell at fair market value and can usually stay up to 90 days. It is an offer, not a right, so ask early.
Sources
- Ontario.ca – Power of sale assignments (policy) — ontario.ca
- Ontario Court Forms – Mortgage Act Forms — ontariocourtforms.on.ca
- Court of Appeal for Ontario – Hume v. 11534599 Canada Corp., 2022 ONCA 575 — ontariocourts.ca
- Court of Appeal for Ontario – Martin v. 11037315 Canada Inc., 2022 ONCA 322 — ontariocourts.ca
- CanLII – Mortgages Act, R.S.O. 1990, c. M.40 — canlii.org
- Court of Appeal for Ontario – Sheth v. Randhawa, 2022 ONCA 89 — ontariocourts.ca
- Court of Appeal for Ontario – 2544176 Ontario Inc. v. 2394762 Ontario Inc., 2022 ONCA 529 — ontariocourts.ca
- CanLII – Family Law Act, R.S.O. 1990, c. F.3 — canlii.org
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a real estate question
Start a file online — flat, published fees, reviewed by a licensed lawyer before a dollar is owed.