Suppose you sign a contract to purchase a condominium in British Columbia. You pay a deposit and meet all conditions. However, before closing, the seller refuses to complete the sale and instead tries to sell the condominium to someone else for a higher price.
You begin real estate litigation in the BC Supreme Court seeking an order forcing the seller to transfer the condominium to you.
Because your claim directly affects title to land, you should apply for a Certificate of Pending Litigation (CPL) against the condominium’s title with the court and register it at the Land Title Office, protecting your interest in the property.
What is a Certification of Pending Litigation?
A Certificate of Pending Litigation is a legal tool often used in real estate disputes, issued only by the BC Supreme Court, and registered against the title of a property with the Land Title Office. The notice flags to potential buyers that the property is subject to ongoing real estate litigation and indicates to other interested parties that they should be cautious about entering into any related agreements.
The CPL effectively prevents the property owner from selling, mortgaging, or encumbering the land or the property without the approval of the party who registered the CPL, keeping the land in its present state until the real estate litigation process is resolved.
The notice ensures that the property will still be available to satisfy the judgment if the plaintiff wins the outstanding legal case. So, filing a CPL protects a direct interest in a property.
When is a CPL issued in BC?
A Certificate of Pending Litigation is issued by the BC Supreme Court in cases where the ownership or interest in a piece of real estate is disputed. Most commonly, this involves:
- A breach of contract.
- A fraudulent transaction (using misappropriated funds).
- Family disputes involving property.
What is required to file a Certification of Pending Litigation in BC?
A CPL can be issued if the party requesting it can demonstrate to the court that a genuine legal issue exists (not merely a monetary issue) and that they have a reasonable claim to the property under Section 215(1) of the Land Title Act.
In summary, to be valid, the request to the Supreme Court must:
- Claim legal/equitable interest in the land (or the CPL request will not be accepted).
- Be consistent with an interest in the land (or damages to the property owner may be awarded).
- Not be used as leverage for money or a “bargaining tool” (or the court may order costs against the requesting party).
CPLs are useful for protecting property interests during disputes but the potential financial risks associated with filing a request mean that you should proceed carefully. Frivolous or vexatious claims intended to pressure property owners into a settlement, with no legitimate land interest, will be thrown out.
To avoid unnecessary costs and wasted time, check that your request for a CPL is legally valid with a qualified lawyer before approaching the court.
If you are seeking monetary compensation, your lawyer can advise you of other legal remedies available and help you avoid unwanted legal and financial repercussions.
How to register a Certificate of Pending Litigation in BC
If a CPL has been registered against your land or property, you should understand the circumstances under which the certification can be removed.
Legally, the CPL can be removed if:
- The court decides to cancel the CPL because it does not meet the requirements set out in s. 215 of the Land Title Act (e.g., the claim does not disclose an interest in the land, is vexatious, etc.)
- The CPL has been registered but legal proceedings have not advanced for one year and the owner requests cancellation with the court.
- The underlying legal action has been discontinued or resolved, and the real estate owner applies to the court for cancellation.
- The underlying action is dismissed, and no appeal has been filed, the time limit for an appeal has expired, or a notice of appeal had been filed but was disposed of.
- The person who filed the CPL requests cancellation (often as part of the settlement or sale).
- An applicant who is a registered owner or claims to be entitled to an estate or interest in the land shows the court that they experienced, or will experience, hardship and inconvenience from the CPL.
- The CPL was improperly issued (against the wrong land parcel or without the correct legal steps being followed).
The Land Title Office removes a CPL from title only after it receives authority to do so, usually in the form of a BC Supreme Court order (or a consent or statutory trigger). The Land Title Office does not independently decide whether a CPL should be cancelled.
Filing real estate litigation and applying for a Certificate of Pending Litigation generally requires the assistance of experienced legal professionals. For a free 30-minute consultation about your legal options, contact the team at Legalbird today.
