Understanding a Certificate of Pending Litigation
You are preparing to mortgage your property or put it on the market to sell when you find out there is a Certificate of Pending Litigation (CPL) registered against your property. Due to the CPL, you cannot get a mortgage or sell your property. What is a CPL and what can you do to remove it?
A Certificate of Pending Litigation is a form of charge that is registered against land, used where a plaintiff has commenced a legal action and is asserting an interest in the land. The effect of the CPL is to notify the land owner and public that this land is subject to litigation proceedings and the plaintiff is claiming an interest in it. It effectively ties up the land owner’s ability to sell the land, transfer it or mortgage it. On the other hand, a CPL provides protection to the plaintiff who is claiming beneficial interest in the land.
For example, the plaintiff asserts he lent money to the land owner, which was used to purchase properties. The plaintiff claims the money was not repaid and claims an interest in the properties by registering CPLs on title to the properties. This has the effect of pressuring the land owner to resolve the dispute with the plaintiff.
A landowner who wishes to have the CPL removed quickly will have to provide evidence that hardship and inconvenience are experienced or are likely to be experienced as a result of the CPLs.
Absent consent by the plaintiff to remove the CPL, the landowner will have to bring a court application and seek an order to discharge the CPL. The Court may discharge the CPL completely, discharge the CPL but require the landowner to pay money into court as security, or refuse to discharge the CPL but require the plaintiff to pay money into court or enter into an undertaking to abide by any court order for payment of damages payable to the owner of the land if it turns out the CPL was improperly registered.
Determining whether a party has a proper right to register a CPL against title to land or determining how a landowner can remove a CPL requires a thorough analysis of the claim and the evidence necessary to uphold or discharge the CPL.