Certificate of Lis Pendens in Alberta: What It Means for Title

You are looking at a land title and see a certificate of lis pendens. It is not a mortgage or a sale document, and it is easy to wonder whether it blocks your plans. In plain terms, it tells anyone searching the title that a court case connected to the land has been started.

This article explains how a certificate of lis pendens works in Alberta in the builders' lien setting, when one is needed, what it can mean if you are selling, buying or refinancing, and the main ways it can be removed. Details turn on the specific title and file, so a lawyer should confirm your situation.

This article covers the law of Alberta.

What a certificate of lis pendens is

"Lis pendens" is Latin for a pending lawsuit. A certificate of lis pendens is a document registered at the land titles office to show that a court action affecting the land is under way. The best-known use for owners is with a builders' lien under the Prompt Payment and Construction Lien Act, which replaced the older Builders' Lien Act name.

The court clerk may grant the certificate to a lienholder who is a party to the proceedings, and a party may then register it at the land titles office.

Why a lien claimant registers one

A lien is not permanent just because it was registered. A registered lien ceases to exist unless, within 180 days from the date it is registered, the claimant commences an action to enforce it and registers a certificate of lis pendens. The Act's own expiry period is 180 days, not two years.

If the claimant does both in time, the lien is continued. It then lasts until the proceedings are concluded or the certificate of lis pendens is discharged, whichever is later.

There is one exception. If the court has ordered the lien removed from title because security was given or money was paid into court, the lien as a charge on that money or security does not cease merely because no lis pendens was registered or no action was started within 180 days.

What it can mean when you sell, buy or refinance

A certificate of lis pendens does not decide who is right. It warns buyers and lenders that there is an active dispute about a claim against the land. In practice, many buyers and lenders will want the matter resolved, or the claim secured another way, before they go ahead. How a particular buyer, lender or title insurer responds varies, so ask early.

If you are an owner, one option is to apply to the court for an order removing the lien's registration from title where security is given or money is paid into court for the claim amount, the statutory maximum, or a lesser amount the court sets, plus costs. Once a statement of lien is registered, the owner, or an authorized mortgagee, may give security or pay into court the major lien fund, the minor lien fund, or both. The money or security then stands in place of the land and stays subject to the claim.

Ways a lien and lis pendens come off title

• Discharge by the lienholder: the Registrar must cancel a lien, in whole or in part, on a prescribed-form notification that it has been satisfied, or on proof that it has ceased to exist. Discharge uses Form 14 under the Prompt Payment and Construction Lien Forms Regulation.
• Court order or payment: the Registrar must cancel the lien and any lis pendens certificate on a certified court order cancelling the lien, or a clerk's certificate that the amount was paid into court or the land was sold to satisfy the lien.
• Withdrawal or discontinuance: the Registrar cancels a lis pendens on a clerk's certificate that the proceedings are discontinued, or on a signed withdrawal.
• Notice to commence an action: an owner or other affected person can serve written notice on the registered lienholder, and if the lienholder does not start an action and register a certificate of lis pendens within 30 days of service, the lien ceases to exist. This does not apply where security is given or payment is made into court and the lien is removed from title.
• Delay in the case: if no trial has been held within 2 years from registration of the certificate, an interested party may apply to have the certificate vacated and the lien discharged.

Where an owner applies to remove a lien by security or payment into court, a party may serve a notice to prove the lien. The lienholder then has 15 days to file an affidavit with detailed particulars, and if it does not, or within any further period the court orders, it loses its lien.

What to do next

• Get a current copy of the title and of the registered lien and certificate.
• Note the dates: when the lien was registered, and when the certificate of lis pendens was registered.
• Check whether the lienholder started an action within the 180-day window.
• Ask whether the claim can be resolved, paid, or secured through the court.
• Speak with a lawyer before serving any notice, since service has specific methods.

Notice to commence an action must be served by personal service, single registered mail to the address for service in the statement of lien, or delivery to that address. Getting service wrong can undo your effort, so have a lawyer confirm the steps.

Frequently asked questions