45 Park Lane Circle was built in the 1980s and underwent extensive renovations in 2024.Sotheby’s International Realty Canada
No. 45 Park Lane Circle has piqued the interest of prospective buyers in Toronto’s Bridle Path neighbourhood since the striking white bungalow landed on the market in late November with an asking price of $22.8-million.
The listing represents a rare offering in the exclusive enclave because the house renovated in a contemporary California style is being sold under “power of sale,” explains broker Jane Zhang, who represents the lender.
Buyers have taken notice because the same house has been listed for sale by the homeowner since August with an asking price of $25-million. In 2024, the home was listed with an asking price of $29-million.
To be successful, the lender needs to set a more eye-catching price, says Ms. Zhang, senior vice-president at Sotheby’s International Realty Canada.
The price is also negotiable, she quickly adds.
Properties listed by a lender remain a small portion of the broader market in Toronto, but the words “power of sale” have been appearing more frequently in 2025 in segments from micro condos in downtown towers, to suburban three-bedroom homes in Hamilton and mansions in affluent pockets of Toronto.
Some highly indebted homeowners and developers came under financial pressure as the Bank of Canada delivered the first of 10 increases to its key lending rate in March, 2022.
When real estate values were marching higher in past years, distressed borrowers had the option of selling a property to pay off the debt.
But today, the average home price in the Greater Toronto Area stands about 22 per cent below the February, 2022 peak, with the slide in some properties and areas closer to 30 per cent. In some cases, owners are selling for less than they paid in 2016.
Ms. Zhang says some homeowners are distressed after a decade or more of overleveraging their house for income and investors are struggling because rents have dropped.
The above-ground living space of 7,000 square feet of the one-storey home is relatively compact compared with other houses in the neighbourhood.Suti Z.
“It’s very unfortunate,” she says. “They are now facing negative cash flow and higher borrowing costs.”
Some lenders step in and force a sale after borrowers stop repaying a mortgage or breach the terms and conditions of the loan, she adds.
In Ontario, the “power of sale” process differs from “foreclosure” in that the lender does not take title of the property.
Andre Kutyan, broker with Harvey Kalles Real Estate, has represented lenders in the power of sale process and also buyers who want to negotiate a deal.
He warns that the clause stating that properties are sold “as is, where is” can lead to unpleasant surprises.
“The bank is not going to warrant anything,” he says, recalling the time someone stole the kitchen wall oven out of a house in Lytton Park before closing.
“Whatever’s in the house – I can’t guarantee it’s going to be there.”
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When representing the buyer, he recommends a quick closing because of the pitfalls that can emerge.
He is not seeing a surge in properties being sold by the lender, but he has seen builders run into trouble with construction loans recently. In some cases, those homes are listed before completion.
“It’s very rare to see a property listed under power of sale in the Bridle Path,” says Ms. Zhang.
She explains that the buyers of many of the area’s palatial homes are ultrahigh net worth individuals who do not require a mortgage.
“I know my clients.”
At 15 High Point Rd., for example, Ms. Zhang has listed an opulent seven-bedroom residence with an asking price of $49.95-million. The French-revival style mansion with 16,684 square feet of living space includes an array of salons, a concert hall and indoor and outdoor pools.
Ms. Zhang says sales in the Toronto-area real estate market overall have been slow this year, and the foreign buyers’ ban, which is set to remain in place until Jan. 1, 2027, has also reduced the buyer pool.
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Luxury properties occasionally face power of sale when their owners – even billionaires – default on loans due to massive debt, failed businesses or sudden market crashes, says Ms. Zhang.
“It’s a huge loss,” she says of the tribulation some homeowners face. “We feel sympathy.”
At 45 Park Lane Circle, Ms. Zhang says she has had many inquiries from interested parties since she listed the property.
The lender who initiated the power of sale process is a private banker who brought the property to the Multiple Listing Service of the Toronto Regional Real Estate Board for maximum exposure, she explains.
Viewings will take place during a limited window because the house is currently occupied by a tenant, she adds.
The home, built in the 1980s, was extensively renovated in 2024 with large skylights, indoor-outdoor spaces and a meditation nook.
The biophilic design is meant to create a profound sense of relaxation and connection with nature, she says.
“It’s very good for your mental and physical well-being.”
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The 2.1-acre lot typical of the Bridle Path is set in a section with little traffic and many mature trees, she says, but the one-storey home’s above-ground living space of approximately 7,000 square feet is relatively compact compared with homes in the area with more than 25,000 square feet.
The home has an additional 7,200 square feet on the lower level with walkouts to the pool and gardens.
Ms. Zhang also cautions that buyers of a power of sale property should be aware that the process comes with some caveats.
For example, the homeowner may be able to refinance or pay off the debt right up until closing, she says. In that case, the deal with the new buyer falls through.
The rules that apply to landlords and tenants govern rental properties, she says, and a tenant is not the lender’s responsibility.
There may be more than one mortgage on the property, along with taxes owed and liens placed by trades who have not been paid.
Ontario law determines the order in which claimants are paid from the proceeds of a sale, with taxes at the top of the hierarchy. In some cases, the lender initiating the power of sale process may be second or third in line among mortgagees.
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Ms. Zhang recommends that prospective buyers do their due diligence and have their own lawyer check regularly to see if any new claims have been registered against title.
The lenders must seek fair market value for the property and not sell at a steep discount simply to recover the money they are owed, she says. After creditors are paid, the homeowner is entitled to any surplus.
Still, some potential buyers are willing to deal with the risks and idiosyncrasies in the hope of securing a favourable deal, she says.
In the upper tier, buyers and sellers’ agents ensure that potential purchasers are well-qualified financially before they are given an appointment to view the home.
“We’re really asking the buyer – make sure your financing is in order.”