Certificates of Pending Litigation: What You Need to Know

If you have a legal or financial interest in a property that is not in your name, there are many legal options available to you in order to receive the money that is rightfully owed to you back.  In order for an Ontario court to grant you a certificate of pending litigation (CPL) you will need  to first exhaust your other options (such as suing the property owner). 

If you are granted a CPL by the court, it will stop the resale of the property until the debt has been resolved. 

How does a Certificate of Pending Litigation work?

A CPL protects your interest in the debtor’s property if other legal tactics to recover your money have failed. Since this certificate prevents a property owner from selling their home, refinancing, or otherwise disposing of the property, the standard of proof that such a measure is required is quite high. 

The CPL works in a way that is similar to a contractor’s lien, which makes finding buyers for the property close to impossible. 

Under what circumstances May I request a Certificate of Pending Litigation?

There are two main scenarios when a CPL would be appropriate: 

• You are owed money

Say that you and a friend purchase a rental property together and for convenience you put the title in your friend’s name. As equity builds up in the property, you stand to gain a tidy profit if you sell. But when you hear that your friend already has plans to sell the property – and the title and mortgage are both in their name – then you need to act fast to assert your financial interest in the property. 

If an Ontario court will grant you a CPL, then you will be able to prevent this friend from selling or mortgaging the property until your dispute over ownership is resolved. 

• Seller refuses to close

You’ve made an offer to purchase a home in Ontario and it was accepted. But now the seller won’t close. To recover your deposit, your lawyer may advice you to apply for a CPL. 

Registering a Certificate of Pending Litigation

If you think that registering a CPL might be your best option, you will have to apply to an Ontario court judge. An experienced civil litigation lawyer can help you with this. 

What if I want to have a CPL removed from a title of a property that I own?

If a dispute is over, or the claimant isn’t pursing their claim, then you may ask the court to cancel a certificate. You may also be able to get a CPL cancelled if you can demonstrate to the court that it will cause hardship – such as forcing you to declare bankruptcy. 

You should also be able to get the certificate removed if you can pay the proceeds from the sale to the court until the dispute is resolved. 

When do you need a real estate lawyer?

Having a real estate lawyer whenever you buy or sell property can save you a lot of legal hassle down the road. Your lawyer will conduct a title search before you purchase any property and advise you of any pending lawsuits of certificates of litigation that may block the sale. 

Contact Minhas Lawyers today

If you need help applying for a certificate of pending litigation, or if you need help getting one removed by the court, then contact us today to book a consultation!