Every lender I act for remembers the phone call. The borrower who was two payments behind is now four. The cheque bounced again. The property taxes are in arrears and you found out from the municipality, not the borrower. The comfortable file has become a problem file, and the question in your head is the one I get asked more than any other:
"How fast can I get my money back?"
The honest answer is that the speed of your recovery is usually decided in the first 60 days after default — and often before you even pick up the phone to a lawyer. After years of enforcing mortgages for private lenders, MICs, and mortgage brokerages across Ontario, I can tell you that the lenders who recover cleanly are rarely the ones with the best security. They're the ones who move deliberately, in the right order, from day one.
Here's how those first two months actually unfold in Ontario, and where files quietly go wrong.
Power of sale is almost always the answer, but not on day one
Ontario gives a lender two real enforcement paths: power of sale and foreclosure. In practice, power of sale wins the overwhelming majority of the time, and for good reason. Foreclosure extinguishes the borrower's interest and hands you the property, but it's a court proceeding that is slower, and by taking the property in full satisfaction you generally give up your right to chase the borrower for any shortfall. Power of sale lets you sell the property, apply the proceeds to what you're owed, and still pursue the borrower personally on the covenant for any shortfall, while accounting to them for any surplus.
That flexibility is why nearly every private mortgage in this province is enforced by power of sale. But the tool comes with a timeline that is set by statute, not by how frustrated you are, and this is where discipline matters.
Under Ontario's Mortgages Act, you cannot issue a Notice of Sale until the default has continued for at least 15 days. Once the Notice of Sale is properly served, you must wait a further redemption period of at least 35 days before you can actually sell, and in practice that window often runs closer to 40 days once service and mail time are accounted for. During that notice period, section 42 of the Act ties your hands in a specific way: you cannot take a fresh step in the enforcement — no issuing a claim, no taking possession, no signing an agreement of purchase and sale — without risking invalidating the very Notice you served.
I say this bluntly to lenders because it is the single most common own-goal I see: an anxious lender (or a lawyer moving too quickly) takes a step during the redemption period, and the whole Notice of Sale has to be started over. Weeks evaporate. The fastest enforcement is the one you don't have to redo.
The 60-day map
Here is the sequence I walk lender clients through, and roughly where each piece lands:
Days 1–15 — Confirm the default and build the file. Before a single notice goes out, we verify the default is real and documented, obtain an updated payout, order a title search to identify every party who must be served (second mortgagees, lienholders, execution creditors, spouses with possessory rights), and confirm the mortgage's own notice provisions. Files fail at the finish line because service was defective at the start. This is also when we decide whether a receiver should be appointed — often the right move on commercial or income-producing property where rents need protecting.
Days 15–20 — Serve the Notice of Sale. Once the statutory 15 days have run, the Notice goes out to every required party, correctly. This starts the redemption clock.
Days 20–55 — The redemption period, used well. This is not dead time. It's when the borrower either cures, sells, refinances, or does nothing — and it's when a well-run file lines up the next move so that the day the period expires, you're ready to act rather than starting to think. If the borrower goes quiet, we prepare for possession and sale in parallel (without taking a prohibited step) so no time is lost.
Days 55–60+ — Possession, sale, and the shortfall. After redemption expires, we move to obtain vacant possession where needed and market the property. And critically, we protect your right to the shortfall. A power of sale requires you to act in good faith and take reasonable steps to obtain a proper price — cut corners on the sale and a borrower's lawyer will use it against you when you come for the deficiency. Done properly, the sale closes and the shortfall claim proceeds on the covenant.
Where lenders lose money (and time)
Three patterns account for most of the avoidable losses I see:
Defective service. Miss an execution creditor or a subsequent encumbrancer on title, and your sale can be challenged after the fact. The title search on day one is cheap insurance.
Moving during the redemption period. As above — a single premature step can reset the entire process. Patience in the right window is speed.
A sloppy sale process. Selling too fast, too cheap, or without a defensible marketing effort hands the borrower a "the lender didn't get fair value" argument that can shrink or wipe out your shortfall recovery. I've litigated these arguments from both sides of the record; a clean sale file wins them before they start.
Why we built the firm this way
At Freedman Benipal Wu LLP, we set the firm up to be a one-stop shop for lenders, because the handoffs between closing lawyers and enforcement lawyers are where files stall. When you place a mortgage, Seth Freedman and Greg Wu handles the closing. If that mortgage ever goes sideways, the enforcement — power of sale, possession, receivership, and the shortfall litigation — runs down the hall through my desk and Greg Wu's. Same firm, no lost weeks re-explaining the deal to a stranger. For a private lender doing volume, that continuity is the difference between a recovery measured in months and one measured in quarters.
The takeaway
A default is not an emergency if you treat the first 60 days as a process rather than a panic. Confirm the default, search the title, serve correctly, respect the statutory clock, and run a defensible sale — in that order — and Ontario's enforcement regime works efficiently in a lender's favour. Skip a step to save a week, and you'll usually spend a month getting it back.
If you're a lender with a file starting to slip — or you simply want an enforcement lawyer on standby before you need one — I'm always happy to have that conversation early. The best time to plan a recovery is before you need it.
About the author
Perry Benipal is a founding partner of Freedman Benipal Wu LLP and leads the firm's mortgage enforcement and lender recovery practice. He acts for private lenders, MICs, and mortgage brokerages across Ontario on power of sale, possession, receivership, and shortfall litigation, and has appeared on numerous reported mortgage-enforcement decisions.
- 📞 Call: 416-603-0167
- ✉️ Email: Benipal@fbwlaw.ca
- 💬 Have a file slipping? Request a consultation
This article is general information about Ontario law, not legal advice. Enforcement timelines and requirements depend on the specific mortgage and circumstances — get advice on your particular file before acting.