What is a certificate of pending litigation? It is a legal instrument registered on a property’s title that serves as a notice to the general public that the property has been subject to legal proceedings. This serves as a warning to other property stakeholders, including potential buyers, about the existence of litigation against the property. The instrument can be a great asset in real estate transactions, but it is not always necessary.
Alternatives to registering a certificate of pending litigation
Having a Certificate of Pending Litigation (CPL) registered on the title of property protects the claimant’s interests in that land. In the case of a property sale, a CPL will prevent the land title office from charging, transferring or otherwise affecting the land. According to the Supreme Court of British Columbia, a CPL is often used before judgment has been entered, as it protects a valid interest in the land until the litigation is resolved.
The Land Title Act authorizes the filing of a certificate of pending litigation or similar instrument. Sections 215 to 217 and 252 to 258 of the Act govern the process. Electronic versions of the Land Title Act Form 17 Charge, Notation, Filing, and Notation have been approved by the director. Alternatives to registering a certificate of pending litigation include the use of a Trust Account or a Certificate of Pending Litigation trust account.
Getting leave to register a certificate of pending litigation
What is a Certificate of Pending Litigation? It’s a document issued by the Registrar of the court in which a proceeding was begun. A copy of the pleading, petition, notice of application, or other document relating to the litigation is attached. For example, if you are seeking to register a certificate of pending litigation on land, you must attach a copy of Form 31. This document identifies the party holding charge of the land.
The CPL is a legal instrument used by people to notify others of ongoing litigation. If you’re trying to sell your property, you can’t register a mortgage on it until the litigation is resolved in court. You can’t refinance or sell the property with a CPL on it, but a purchaser can compel the vendor to close the deal. Fortunately, a Certificate of Pending Litigation is not permanent. In many cases, a CPL is dischargeable once the dispute is resolved in court.
The test for registering a certificate of pending litigation
A certificate of pending litigation (CPL) serves as a notification to the world at large that title to a property is disputed. However, it does not prevent the actual transfer of title, since the certificate applies to any change in title. This makes the certificate of pending litigation a risky instrument to use, and it should only be used when there is a valid land interest in dispute.
When a property is subject to a CPL, it is best to seek legal advice from a real estate lawyer before attempting to sell it. A CPL serves as a warning to property stakeholders, including prospective buyers, that the property is subject to a legal proceeding. In some cases, a CPL can be discharged after the dispute has been settled. Two recent decisions by Ontario Superior Courts have reaffirmed the factors that courts consider when granting a CPL.