All too often the question of ownership over a piece of real estate is part of the larger puzzle of an estate dispute. If a party is asserting a claim of ownership over piece of real estate where they are not the registered owner, registering a caution on title or a certificate of pending litigation may preserve their interest until the dispute is settled.
Cautions on Title
Registering a caution on title, often shortened to simply a “caution”, is often the first step taken by parties when they need to assert a claim of ownership over a piece of real estate. It is perhaps most useful when there is the possibility that the property may be sold by the person(s) registered on title to an innocent party who is unaware of the third party’s claim. This is because where an innocent party purchases a property for value without knowledge of any other party’s claim against the property, they take good title. Broadly speaking, registering a caution signals to any party who may seek to deal with the property that a third party may have an interest in the property so they can no longer purchase the property for value without knowledge.
Sections 71 and 128 of the Land Titles Act enumerate situations where a caution may be registered on title. When it comes to estate matters a caution will likely be registered under section 128. Cautions registered under this section must be based on a proprietary interest, such as the interest of someone claiming to be the beneficial owner of a property subject to an agreement or a trust.
Perhaps most importantly, anybody thinking of registering a caution under section 128 should bear in mind that a caution on title will expire after 60 days. While in some situations it is possible to renew the caution for another 60 day period, a caution cannot be renewed more than once. Apart from letting it expire, the party responsible for registering a caution may withdraw it, or an interested party may make a request to the Land Registrar to remove a caution.
Certificates of Pending Litigation
A certificate of pending litigation, often shortened to “CPL”, is used to warn any interested party that there is an outstanding claim against the property. Unlike cautions, parties must apply to the court to obtain a Certificate. This means that a seeking a CPL may not be practical unless parties are actively embroiled in litigation or prepared to commence a proceeding.
The upshot is that compared to a caution, a CPL is more robust because once a CPL has been issued, it effectively precludes any further dealings with the property. No parties, related or not to the proceeding, may encumber the property. Furthermore, a CPL registered on title it remains until the litigation is concluded or the Court orders the CPL to be discharged.
A party seeking a CPL should be prepared to demonstrate that they have a reasonable claim to an interest in land. At the same time, the court will also weigh factors such as whether the land is unique to the parties seeking the CPL and whether damages would be a sufficient remedy.