The Short Answer
In Ontario, a lender generally cannot issue a Notice of Sale until the mortgage has been in default for at least 15 days. Once the notice has been given, the lender generally cannot sell the property for at least another 35 days. That does not mean your house will automatically be sold on day 35.
The Process Happens in Stages
When mortgage payments fall behind, the lender usually begins with collection attempts and demands for payment. If the default continues, the lender may move into formal mortgage enforcement.
Where the mortgage contains a Power of Sale provision, Ontario law generally requires the default to continue for at least 15 days before a Notice of Sale can be issued.
Mortgage Default
Payments are missed or another default occurs under the mortgage. The lender may begin collection efforts and demand that the arrears be brought up to date.
Notice of Sale
A Notice of Sale may generally be issued after the default has continued for at least 15 days.
Enforcement Can Advance
The property generally cannot be sold for at least 35 days after the Notice of Sale has been given. After that period, the lender may be able to move the enforcement process forward.
Does That Mean I Have 35 Days?
Not necessarily.
The 35-day period is a statutory minimum before a sale can occur in the usual contractual Power of Sale process. It should not be treated as a guaranteed deadline for finding financing or resolving the mortgage.
Lenders, lawyers, appraisers and mortgage providers all need time to do their work. If refinancing is going to be part of the solution, waiting until the final days can make an otherwise workable situation much harder to complete.
The Date on Your Notice of Sale Matters
If you have already received a Notice of Sale, one of the first things I want to know is the date shown on that notice. That tells us much more about the urgency of the situation than simply knowing that you have missed some mortgage payments.
What Happens After the Notice Period?
Once the applicable notice period has expired, the lender may be in a position to take further enforcement steps. Depending on the circumstances, that can eventually include taking possession of the property, listing it for sale and completing a sale under the mortgage.
The actual start-to-finish timeline can vary considerably. Some lenders move quickly. Others take longer. The type of mortgage, the lender, the property and the legal circumstances can all affect the timing.
That is why I would not base a decision on an assumption that you have several months left simply because the property has not yet been listed for sale.
What Can You Do While There Is Still Time?
The right solution depends heavily on the equity in the property, how much is owed and what your longer-term plan is. Possible solutions can include:
Why Acting Early Matters
A Power of Sale problem is usually easier to deal with earlier in the process.
Earlier action gives us more time to determine the property's value, confirm exactly what is owed, review the mortgage and legal documents, arrange an appraisal where required and determine whether refinancing is actually realistic.
Waiting does not necessarily make the problem impossible to solve, but it can reduce the available options and increase the pressure considerably.
Power of Sale Help
Received a Notice of Sale?
Reach out to us and tell us where things stand. We can review the situation, determine how much equity may be available and whether there is still a realistic financing solution.
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