What’s a Certificate of Pending Litigation?

A certificate of pending litigation (CPL) is an instrument that can be registered on the title of a property. A party seeking to register a CPL must bring a motion and prove that they have a reasonable claim to an interest in the land, among other things.

Practically, the CPL provides a warning to the public that the property is a matter of a dispute. The CPL creates an encumbrance on a property and until it is discharged, it prevents the property owner from freely dealing with the charged property. For instance, the property owner may experience difficulty in obtaining a mortgage and selling the property, etc. 

There are various scenarios wherein a motion for a CPL may be brought, such as:

  1. If a property owner’s name has been fraudulently removed from title;
  2. If a purchaser seeks to compel a closing of the sale where a vendor refuses to close.

A CPL  can help protect the claimant’s interest in the land. A CPL can be an effective tool to pressurize the property owner to resolve the dispute. Likely is that no reasonable purchaser will buy the land until the CPL has been cleared and the underlying dispute has been resolved.

To successfully bring a motion for a CPL, it is essential that there is an interest in the property in question. In determining whether to grant a CPL, the courts will consider whether there is an adequate interest in the land and whether the damages would be adequate remedy to an interest claim in land. The Courts will also consider if the case satisfies the thresholds laid down in various decisions, recent one’s being Pacione v. Pacione, (2019 ONSC 813) and Bains v. Khatri (2019 ONSC 1401).

As opposed if the property owners who have been burdened by the CPL can show the person claiming the interest in the property has no claim whatsoever, the motion for a CPL can be rejected by the court.

If you have become involved in a property related dispute and you are unsure of whether you may bring a motion to register a CPL, call our team of lawyers at Falcon Law Professional Corporation for experienced and professional legal advice.

WRITTEN BY: Vidisha Ponkshe May 02, 2021

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