Certificate of pending litigation

A business that owns its premises, or a sale that includes real estate, can turn up a certificate of pending litigation on the title search. It tells a reader that a court claim touching the land exists. That is a reason to read the claim before closing, not a conclusion about how it will end. For the wider closing picture, see what to do about an unresolved lien on title on closing day and the entry on a title search.

How it works in Ontario and British Columbia

In Ontario, the Courts of Justice Act says that starting a proceeding in which an interest in land is in question is not notice of it to a person who is not a party until the court issues a certificate and it is registered in the proper land registry office (s. 103(1)). The certificate may be registered whether the land is under the Land Titles Act or the Registry Act (s. 103(2)). Once it is discharged, any person may deal with the land as if it had not been registered (s. 103(7)). In British Columbia, the Land Title Act lets a person who has started or is a party to a proceeding, in the cases s. 215 sets out, register the certificate in the same manner as a charge. After registration, the registrar must not enter anything that charges, transfers or otherwise affects the land described in it until the registration is cancelled in accordance with the Act (s. 216(1)), subject to the exceptions in s. 216(2).

What to ask

This entry covers Ontario and British Columbia; check the rules where you are. On a purchase, ask:

• Does the title search show a certificate, and which proceeding does it refer to?
• What interest in the land does the claim put in question?
• Will the seller have it discharged or cancelled before closing, and how will that be shown?