Certificate of Pending Litigation in Ontario

A Certificate of Pending Litigation (CPL) is a legal notice registered on a property’s title warning that there’s an ongoing lawsuit affecting an interest in that property. It’s like a warning flag that tells everyone — buyers, lenders, and the public — that the property is involved in a legal dispute.

Once registered, a CPL prevents the owner from selling, mortgaging, or transferring the property without addressing the lawsuit first. This protects the person claiming an interest in the property by freezing it until the court resolves the dispute.

CPLs are used when someone is suing over a claim that directly involves real estate. Common situations include:

Real estate disputes:

• Breach of purchase and sale agreements
• Disputes over property ownership or boundaries
• Claims that someone fraudulently transferred property

Estate disputes:

• Fighting over inherited property
• Claims that property should be part of an estate

Partnership and business disputes:

• Partners fighting over jointly owned commercial property
• Shareholder disputes involving real property

The key requirement is that your lawsuit must claim an actual interest in the specific property — not just monetary damages. You can’t register a CPL simply because someone owes you money.

When a CPL is registered on title, it creates a “cloud” on the property. Anyone searching the title sees the CPL and knows there’s a legal dispute. This makes the property likely unsellable because most buyers won’t purchase property with active litigation attached, and most lenders will not mortgage it.

The CPL stays on title until the lawsuit ends or the court orders it removed.

Registering a CPL involves both starting a lawsuit and registering a document on the property’s title.

Step 1: Start a lawsuit

You must first file a Statement of Claim seeking an interest in the property. Your claim must be genuine and reasonable —frivolous claims will be struck down and you could face cost penalties.

Step 2: Obtain court permission 

You often need court permission before registering a CPL. This requires a motion for court approval of the CPL.

Step 3: Prepare the CPL document

Complete the required form (Form 42A – Certificate of Pending Litigation) including:

• Court file number and parties’ names
• Legal description of the property
• Nature of the claim
• Date the lawsuit was started

Step 4: Register with Land Registry

File the CPL with the Land Registry Office where the property is located. If the property is in the electronic land registration system, you’ll need a lawyer or licensed paralegal to register it electronically.

Courts don’t grant CPLs automatically. To obtain or maintain a CPL, you must satisfy the court that:

1. You have a reasonable claim to an interest in the land

Your lawsuit must claim ownership, a beneficial interest, or another recognized interest in the specific property. Claims for only monetary damages don’t qualify.

2. The property is unique or special

You need to show that monetary damages wouldn’t adequately compensate you. 

3. The balance of convenience favors granting the CPL

The court weighs the harm to you if the property is sold against the harm to the owner from having their property frozen. If you’ll lose your claim because the property gets sold, but the owner only faces inconvenience, the balance favors you.

4. Your claim isn’t frivolous or vexatious

You must have a legitimate legal claim with evidence to support it. Weak, obviously baseless, or malicious claims will be struck down immediately.

If a CPL has been registered against your property, you have several options to remove it.

Option 1: Settle or resolve the lawsuit

If you reach a settlement with the person who registered the CPL, they can discharge it voluntarily. This is often the fastest solution. The claimant signs a discharge document that gets registered on title, removing the CPL.

Option 2: Bring a motion to discharge the CPL

You can ask the court to remove the CPL by proving:

• The claim doesn’t actually relate to an interest in your property
• The claim is frivolous, vexatious, or has no merit
• The harm to you outweighs any benefit to the claimant
• The claimant can be adequately protected through other means (like a bond)

Option 3: Post security

The court may agree to discharge the CPL if you post security (like a bond) equal to the value of the disputed interest. This protects the claimant financially while freeing your property.

Option 4: Wait for the lawsuit to conclude

Once the lawsuit ends — whether through settlement, trial judgment, or dismissal — the CPL must be discharged. If the claimant loses their case completely, they must remove the CPL. If they win, the court’s order addresses what happens to the property.

Costs and damages: If you successfully remove a CPL that was improperly registered, you can seek costs and potentially damages if the CPL caused you financial harm (like lost sale opportunities).

For the person registering:

If you register a CPL without proper grounds, you face serious consequences. The court can order you to pay the property owner’s legal costs for removing it. If the CPL was malicious or caused significant harm, you might also be liable for damages: lost sale proceeds, lost financing opportunities, or other financial losses.

For the property owner:

A CPL effectively freezes your property until the dispute resolves. You can’t sell or refinance, which can cause significant financial hardship if you need to access equity or relocate. However, you can still live in the property and rent it out.

CPLs are powerful tools with serious consequences. Consult our lawyers if:

You’re considering registering a CPL: Get advice on whether your claim qualifies, the proper procedure, and potential risks if you’re wrong.

A CPL has been registered against your property: Act quickly to assess whether it’s valid and how to remove it. Delays cost money and opportunities.

You’re in a property dispute: Determine whether a CPL is an appropriate strategy or if other remedies better suit your situation. 

Contact Pinto Shekib LLP at info@pintoshekib.ca or 416.901.9984 to schedule a confidential consultation about Certificates of Pending Litigation and real estate disputes in Toronto and Ontario more broadly.