Power of Sale


Also found in: Financial.

Power of Sale

A clause commonly inserted in a mortgage and deed of trust that grants the creditor or trustee the right and authority, upon default in the payment of the debt, to advertise and sell the property at public auction, without resorting to a court for authorization to do so.

Once the creditor is paid out of the net proceeds, the property is transferred by deed to the purchaser, and the surplus, if any, is returned to the debtor. The debtor is thereby completely divested of any interest in the property and has no subsequent right of redemption—recovery of property by paying the mortgage debt in full.

References in periodicals archive ?
Mr Abuga also said that the Central Bank of Kenya did not consult their lawyers over the method of disposal, but proceeded to use its statutory power of sale.