Stopping a Certificate of Pending Litigation Before It Landed

The situation

Adaeze trained and worked as a registered nurse for a decade before starting a small home-care agency out of her Ottawa house, sending caregivers and support workers into clients' homes across the city. The business had grown steadily, and after five years she and her husband decided to sell that house and move somewhere with a dedicated office space. They accepted an offer of $340,000 from a buyer named Kofi, a plumber buying his first home, with a closing date roughly ten weeks out.

Two weeks after the agreement of purchase and sale was signed, Adaeze got a letter from a paralegal representing Amina, a former administrative coordinator who had left the agency eight months earlier. The letter alleged Amina was owed roughly $40,000 in unpaid overtime and vacation pay accumulated over three years, and — more unusually — claimed Amina had an ownership interest in Adaeze's house because she had, in the letter's words, "contributed capital and labour toward a business the parties agreed to co-own," pointing to a home office renovation Amina had helped pay for and manage two years earlier.

Adaeze did not think the ownership claim had merit. But she was about to sell a house with a closing date locked in, and she recognized the letter for what it was: an opening move that could turn into something that reached her title. She brought the letter, the renovation records, and her agreement of purchase and sale to our team before responding to anything.

What the review found

The claim Amina's letter described had two separate legal threads, and only one of them was actually about money. The unpaid overtime and vacation pay was a straightforward employment claim under the Employment Standards Act, 2000, which sets minimum entitlements for overtime pay, vacation pay, and other wages that employers in Ontario must meet regardless of any private agreement to the contrary. A claim of that kind, even if disputed, would ordinarily be resolved through a wage complaint or a lawsuit for a sum of money — it would not touch the house at all.

The second thread was the real risk. By framing the renovation contribution as an unwritten agreement to co-own real property, Amina's letter was laying groundwork for a claim of what the law calls a constructive trust — an equitable remedy where a court can recognize someone's financial or in-kind contribution to a property by giving them an ownership interest in it, even without their name on title. If Amina's lawyer proceeded to sue on that basis, Ontario procedure allows a claimant asserting an interest in specific land to register a certificate of pending litigation against the property's title. A certificate of pending litigation, often shortened to a CPL, is a document registered in the land registry that puts the world on notice that a lawsuit claims an interest in that property. Once registered, it does not stop an owner from selling outright, but in practice it makes a sale nearly impossible: no lender will advance mortgage funds against a title with an unresolved ownership claim on it, and no buyer's lawyer will let a purchase close with that certificate still registered, because their client would be buying into the middle of someone else's lawsuit.

Nothing had been registered yet. Amina's letter was a demand, not a statement of claim, and no certificate had reached the Ottawa land registry office. That gap — between a threatening letter and an actual filed claim with a registered certificate — was the entire window our team had to work with, and closing was still eight weeks away.

What we did

1. Separated the two claims immediately. Our team responded to Amina's paralegal distinguishing the wage claim, which Adaeze was prepared to discuss on its merits, from the property claim, which we set out to challenge directly. Treating them as one bundled dispute would have given the weaker ownership argument more weight than it deserved.
2. Assembled the paper trail on the renovation. Adaeze still had the contractor invoices, the e-transfers, and text messages from the renovation two years earlier. They showed Amina had fronted about $9,000 toward materials, which Adaeze had repaid within four months with a $9,000 transfer of her own — a loan repaid, not an investment held. That record mattered because a constructive trust claim depends on showing a genuine contribution made in the expectation of an ownership stake; a repaid loan for home renovations does not meet that bar.
3. Reviewed the closing timeline against the litigation timeline. Even if Amina proceeded to sue and sought a certificate of pending litigation, registering one requires filing a claim, bringing a motion or meeting the procedural requirements before the land registry office, and serving the other side — none of which happens overnight. Mapping that process against Adaeze's ten-week closing window let us see where the real pressure points would fall and plan around them rather than react to them.
4. Opened a without-prejudice settlement conversation on the wage claim alone. With the property claim isolated and looking weak on the facts, our team offered to resolve the overtime and vacation pay dispute on its own terms, calculating what Adaeze's payroll records actually showed was owed — roughly $22,000, well under the $40,000 first demanded, once the records were reconciled against hours logged.
5. Kept Kofi's side informed through the sellers' lawyer, on a need-to-know basis. Because no certificate had been registered and no claim had been filed, there was nothing yet that legally had to be disclosed as a defect in title. Even so, Adaeze's real estate lawyer stayed aware of the timeline so that if anything changed, there would be no scramble two days before closing.

The outcome

Amina's paralegal came back within three weeks. Faced with a documented loan repayment rather than an unrecovered investment, and a wage claim that had shrunk once actual payroll records were on the table, the ownership argument was dropped entirely. The parties settled the wage claim at roughly $24,000, split into two payments, with a release signed covering both the employment dispute and any claim to an interest in the property. No statement of claim was ever filed. No certificate of pending litigation ever reached the Ottawa land registry office.

The sale to Kofi closed on schedule. Because the risk was caught and resolved before any claim existed on paper, Adaeze's real estate lawyer never had to disclose a title defect, negotiate an extension, or explain a registered certificate to a nervous buyer's lender. The entire episode, from the first letter to the signed release, took about five weeks — well inside the ten-week runway the closing date allowed.

Not every claim like this resolves this cleanly. If Amina's contribution had been larger, undocumented, or genuinely tied to a promise of co-ownership, a certificate of pending litigation might have been unavoidable, and the sale could have needed a real postponement or a holdback of funds in trust pending resolution. What made the difference here was timing: the claim was intercepted while it was still a letter, not a filing, which meant the strongest tool available to Amina's side — a registered certificate against the title — was never put into play.

What you can learn from this