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Certificates of Pending Litigation

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Certificates of Pending Litigation

Postby Pinskylaw.ca » 11 Nov 2016, 15:11

A certificate of pending litigation (“CPL”) are a unique and powerful tool. Unlike the vast majority of litigants, those with a CPL against title to a property can litigate safe and secure in the knowledge that the subject matter of the litigation will remain available for satisfaction of the ultimate judgment. It is difficult to overstate the value of a CPL in the course of litigation. The owner of a property encumbered by a CPL will face a litany of difficulties. For instance, it will be difficult to refinance an existing mortgage on that land in the face of a CPL. It will be practically impossible to transfer title to that property for the duration of the registration. Put simply, the property owner with this type of registration is effectively frozen in its tracks, unable to deal with their own property in any appreciable way. Moreover, the incentives operate against the interest of the defendant property owner. For example, the property owner subject to a CPL remains liable to pay its mortgage obligations, despite the fact that it has effectively lost ultimate control of the property. The asset must be carried financially for the potential benefit of another.
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