Wrongful Power of Sale Claims

A wrongful power of sale claim may arise where a lender acted without proper authority, moved too quickly, refused a valid payout, sold the property unfairly, mishandled possession, or accounted for the sale improperly. The key question is not only whether the borrower is upset. The key question is whether the lender’s conduct caused a loss that can be proven.

The review usually begins by rebuilding the file. When did default happen? What notice was given? Who received it? What payout was requested? Did the borrower have funds, refinancing, or a sale? How was the property listed? What offers came in? What price was accepted? How were sale proceeds applied?

Notice and timing

Power of sale depends on notice and timing. If the lender served the wrong people, used the wrong address, moved before the required time, or misstated important information, the issue may need review. Service records, envelopes, courier records, registered mail slips, emails, and affidavits of service can matter.

Not every small error creates a claim. The question is whether the issue affected rights, timing, or loss. A serious notice problem may support negotiation, a defence, or a claim depending on what happened next.

Refused payout or refinance

Some wrongful power of sale concerns involve a lender refusing to cooperate with a real payout, refinance, or sale. Proof matters. A borrower should gather commitment letters, proof of funds, closing lawyer emails, payout requests, discharge requests, and lender responses.

If the lender’s refusal caused a refinance or sale to fail, the file should be reviewed carefully. The borrower may need to show that the funds were real, the closing was possible, and the lender’s conduct caused the loss.

Sale conduct and accounting

A lender sale should be reviewed for price, marketing, offers, timing, and property condition. A low price is not automatically wrongful, but poor exposure, rushed sale, ignored offers, or unexplained price gaps may matter.

After closing, accounting is just as important. Legal fees, commissions, taxes, insurance, repairs, interest, and credits should be checked. If the lender claims a deficiency or holds surplus, the calculation should be clear.

Building the claim

A strong claim is built from documents, not suspicion. The notice, payout history, sale records, appraisals, accounting, payment records, and correspondence should be organized. The review should identify what the lender did wrong, what should have happened instead, and what loss resulted.

Some files may lead to a demand letter or negotiation. Others may require litigation. Some reviews may show that the lender acted properly. The important thing is to replace uncertainty with a careful assessment of the record.