Certificate of Pending Litigation (CPL) in British Columbia: Filing and Removal

A certificate of pending litigation, usually called a CPL, is a notice registered on title that a lawsuit affects the land. You may be a party who wants to protect a claim to a property, or an owner or buyer who has just found a CPL on title and wants to know what it means for a sale.

This article explains the general rules for filing and removing a CPL in British Columbia. Because a CPL can stall a sale, getting legal advice early is usually sensible.

This article covers the law of British Columbia.

When a CPL can be filed

Under Land Title Act s. 215(1), a person who has commenced or is a party to a proceeding claiming an estate or interest in land, or who is given a right of action in respect of land by another enactment, may register a CPL against the land in the same manner as a charge. The land must be described to the registrar's satisfaction, and the registrar sends a copy to the registered owner.

The key limit is that the claim must concern an interest in land. Debt claims, such as for an automobile price or a real estate commission, do not qualify, and the registrar rejects CPLs based on a Personal Property Security Act notice of security interest.

A CPL is filed on a Form 17 Charge, Notation or Filing, selecting Certificate of Pending Litigation and attaching the approved Form 31, 32, 33 or 34 and the originating process.

What a CPL does to a sale

Once registered, a CPL effectively freezes the register against further registrations, except those allowed under s. 216 and the s. 217 Rudland rule. Section 216(2) lists exceptions to the freeze, including caveats, priority or postponement agreements, and certain involuntary charges.

In practice, that means a sale, transfer or new mortgage will generally be blocked while the CPL stays on title, unless an exception applies. Buyers and lenders usually will not complete over a CPL without legal advice.

If you are the buyer, check title right before closing, since a title reflects the register only at a specific point in time. A lawyer can tell you whether the claim could affect your purchase.

How a CPL is removed

The Land Title Act deals with cancelling a CPL in ss. 252 to 257:

• generally (s. 252)
• if the action is discontinued (s. 253)
• if the action is dismissed (s. 254)
• if the action is neither discontinued nor dismissed (s. 255)
• on other grounds (s. 256)
• by court order (s. 257)

Under s. 256(1), a registered owner, or a person claiming an estate or interest in the land, may apply for an order cancelling a CPL. The application needs an affidavit giving particulars of the registration, stating that hardship and inconvenience are or are likely to be experienced, and giving the grounds. It goes to the court where the proceeding began: in that proceeding if the applicant is a party, otherwise by petition.

There is an exception under s. 256(2). An owner whose indefeasible title or charge was registered subject to a CPL under s. 217(2)(a) or (c)(ii) may also apply to cancel it. The affidavit must address whether the pleading alleges the owner is not a good-faith purchaser for value, and the dates and times of the owner's application.

Which route fits your situation depends on the status of the lawsuit and the facts, and a lawyer can confirm.

If a CPL was filed on a weak claim

A CPL that rests on a debt claim does not qualify. An owner who thinks a CPL does not belong on title may be able to apply to cancel it, and the application must show hardship and inconvenience. Courts decide these applications on their own facts, so no outcome can be assumed.

What to do next

• Order a current title and read exactly what is registered and when.
• Get a copy of the pleadings or originating process behind the CPL.
• If you filed it, confirm your claim is about an interest in land and not just a debt.
• If you are the owner or buyer, ask a lawyer whether to apply to cancel it or to wait for the lawsuit to end.
• Talk to your lender and the other side early if a closing date is at risk.

Frequently asked questions