Real estate disputes can be a complex and overwhelming process that can cause a lot of stress, time, and money. One of the most frustrating and common experiences is dealing with Certificates of Pending Litigation (CPL). CPLs can impact a property’s value or ability to transfer or be sold. This quick guide will walk you through the basics of CPLs, including what they are, how they impact real estate transactions, and what to do if you encounter a CPL.

What are Certificates of Pending Litigation (CPLs)?

In real estate disputes, a CPL is a legal notification that advises third parties that specific actions are taking place in connection with a particular property. It is essentially a notice that legal proceedings have started, and the result may impact the property’s title. A CPL is a public record in the Land Title Office (LTO) and binds to the property, not the person. Thus, any interested parties can search for a property in the LTO, find the CPL, and note the associated legal proceedings.

How does a CPL Impact Real Estate Transactions?

The presence of a CPL typically puts on hold all active real estate transactions involving the property in question. CPLs create an environment of uncertainty, making the property challenging to sell and delay financing or refinancing. Banks and financial institutions require confidence in the security of their investments before agreeing to approve loans. Thus, the presence of a CPL may make it challenging to secure a loan.

What to do if you encounter a CPL?

CPLs are not everyday occurrences, and it would help if you approached them with caution. If you encounter a CPL while purchasing or selling a property, you need a strong legal team specializing in real estate disputes to manage the situation. Your legal team must carefully examine the CPL and assess the likely impact on the ongoing transaction. With experience and expertise, your legal team can advise you on the best course of action, including possible next steps on resolving the CPL.

Preventing Certificates of Pending Litigation (CPLs)

Preventative measures can save you from dealing with CPLs in real estate disputes. Conducting due diligence on the property’s title can help avoid unnecessary surprises. Diligent reviewing of LTO databases for any pending legal cases against the property can prevent the purchase of a home or commercial property with an attached CPL.
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Real estate disputes can be nerve-racking, but with this guide, you now understand the basics of a CPL. Incorrect handling of a CPL can lead to costly legal battles and result in property loss or devaluation. Consultation with a legal team with extensive experience in real estate transactions can help you avoid pitfalls. Preventative measures such as due diligence can also prevent these situations from happening. With the right knowledge and support team, you can overcome any real estate dispute that comes your way.
PATRICK A. BELL – Lawyer at Bell, Jacoe & Company in Summerland BC provides legal help with real estate and wills and estate law.
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