We are often asked to “file a lien” against title to property owned by an opposing party, but the word “lien” is frequently used incorrectly. Both a lien and a CPL have the effect of encumbering title, making it difficult to sell or refinance the property until the claim is resolved, but they relate to completely different types of claims.
A builder’s lien is used to secure payment by contractors, subcontractors, suppliers, or workers who have supplied labour or materials to improve a property but haven’t been paid. It creates a legal claim against the property itself for the value of the unpaid work or materials. There are strict timelines for the filing of a builder’s lien (discussed in a separate post) and the lien claimant must start a court action and file a CPL within 1 year of filing the lien.
A certificate of pending litigation or CPL registers a charge on the property’s title that there is litigation pending which could affect ownership or an interest in land. It does not create a debt or a lien, nor does it create an interest by itself. It’s simply notice of litigation that protects whatever interest the claimant is asserting in court until the dispute is resolved, because it prevents the registered owner of the property from selling, refinancing or otherwise disposing of the property until the CPL is released. A CPL remains in place until the lawsuit is resolved or the court orders it removed.
If you have a claim and require more information about whether to file a CPL or a builder’s lien, please contact our office.
By: Sanjeeta K. Johal
The information contained in this blog post is provided for general informational purposes only and does not constitute legal advice. It is not intended to be relied upon as advice on any particular matter or as a substitute for obtaining legal advice. Laws and regulations may change over time and can vary depending on your specific circumstances.