Im sure you have heard about distress sales. These are power of sales, or sales that are done by governing bodies such as the Ontario Government. Now they don't just come in and displace you without proper paperwork and justification. It is a full legal process.

Power of Sales occour when a owner of a home defaults on paying their mortgage - each bank or financial institution has their own methods of considering what is default- be in 3 weeks or 3 months- but there is a process. Once the process is complete, the owner still has rights to the home. So if a Power of Sale listing appears and you place an offer that is accepted, then that previous owner who defaulted has the right to redeem, meaning, if they bring their account up to date, then the power of sale proceedings stop and your offer is null and void.

Now dealing with another form of distress sale is a sale from the Public Guardian and Trustee with the Province of Ontario. Loosely, they come into the picture if the person who owns the home is declared mentally incompetent and has no power of attorney. Then all the assets are sold off on their behalf for their care. That is why it is sooooo important to have a Power of Attorney completed, or a living will. That is your way of controlling who takes care of your personal affairs and your property in case of mental incompetency.

I have access to these resources and have family that are real estate lawyers, feel free to ask for more info anytime