A Certificate of Lis Pendens, commonly known as CLP, is a significant document that is registered at the Alberta Land Titles Office. If you are involved in selling or refinancing a property, or if you need to secure an obligation against real estate, it is crucial to understand the implications of a Certificate of Lis Pendens in Alberta. In this article, we will explore what a CLP is, how it is registered, and when it is commonly used in Alberta.

What is a Certificate of Lis Pendens and How to Register a CLP?

A Certificate of Lis Pendens is a document that can be registered at the Alberta Land Titles office. The term “Lis Pendens” originates from Latin, meaning “pending suit.” It indicates that there is a pending lawsuit related to the property. It’s important to note that a Certificate of Lis Pendens in Alberta does not confirm the absolute owing of funds nor does it indicate the success of the lawsuit. Instead, it serves as a warning sign that legal action is underway.

In Alberta, registering a CLP or Certificate of Lis Pendens requires the commencement of a lawsuit. Typically, the lawsuit and the CLP are filed simultaneously to protect the plaintiff’s interest. The process involves completing a simple one-page form available for free download from the Alberta Land Titles Office Procedure Manual. It is essential to have a valid claim or interest in the specific property for which you wish to register the Certificate of Lis Pendens. Registering a CLP is based on legislation and statutory requirements, making it crucial to ensure compliance with all legal obligations.

When are Certificate of Lis Pendens Used?

Certificate of Lis Pendens registrations is most commonly used in specific types of claims. Some examples include matrimonial or divorce law cases, defaulted mortgages, and Builder’s Liens. These registrations act as placeholders to secure interests in the property. The land titles system in Alberta follows the principle of “first in time is first in line.” This means that registrations that are filed earlier have priority over subsequent registrations. While there are exemptions for certain types of claims, such as tax claims to the CRA, it is generally advisable to register a CLP as early as possible. Let’s explore a few common scenarios:

Matrimonial Property

In divorce cases, either or both parties may file a Certificate of Lis Pendens to protect their interest in matrimonial property. It is worth noting that it is not uncommon for individuals to register a CLP against property they own. By registering a CLP, the sale or refinancing of the property is prevented until the negotiation or litigation process regarding the division of matrimonial assets is resolved. It is essential to consult with a family law lawyer to ensure the possibility of selling the property unless a finalized agreement in writing for the division of matrimonial property is in place. Failure to do so can severely impact your negotiating position.

Builders’ Liens

Under Builders’ Lien legislation, parties who register a lien have an obligation to commence litigation within a specific time frame. Given the nature of Builders’ Liens, most individuals have an interest in the property being claimed against. After initiating the claim, the next step is to register the Certificate of Lis Pendens to further protect their interest.

Mortgage Foreclosures

Another example where CLPs are commonly used is in mortgage foreclosure cases. Lenders, by the very nature of the mortgage, have an interest in the property being foreclosed. Filing a Certificate of Lis Pendens informs interested parties that the property is undergoing foreclosure proceedings.

Discharging a CLP

Discharging a Certificate of Lis Pendens (CLP) follows a standard process outlined in the procedure manual available at the land titles office. Technically, the form and procedure for discharging a CLP involve submitting a request to “withdraw” the certificate. Once the form is completed and submitted for registration at the Land Titles Office, the CLP is removed from the property’s title. It’s important to note that the discharge of a CLP occurs only when the underlying legal matter is resolved between the parties involved. It’s not possible for an individual to unilaterally file a discharge of a CLP on their own property.

Why Dealing with the Certificate of Lis Pendens is Important

Addressing Certificate of Lis Pendens registrations is crucial in various scenarios. For instance, when selling a property, the presence of a CLP informs potential buyers about an ongoing foreclosure or a property involved in a divorce proceeding. Furthermore, when selling a home, all debts associated with the property must be fully settled. Discharging a Certificate of Lis Pendens requires either negotiating the removal of the certificate or paying the claimed amount in full. Failing to address a CLP before entering into a sales agreement may result in a breach of contract lawsuit by the buyers. Therefore, it is vital to proactively handle any CLP-related matters to ensure a smooth and legally compliant transaction.

Conclusion

In conclusion, gaining a clear understanding of Certificate of Lis Pendens registrations is crucial when it comes to selling, refinancing, or securing obligations against real property in Alberta. By registering a CLP, individuals can protect their interests in specific properties, especially in cases of divorce, defaulted mortgages, Builders’ Liens, and mortgage foreclosures. It is vital to resolve any CLP-related issues before entering into agreements to sell a home to avoid potential lawsuits for breach of contract. Discharging a CLP involves following the proper procedures outlined in the Alberta Land Titles Office Procedure Manual and usually requires the resolution of the underlying legal matter.

At Passgo, we specialize in real estate and we are here to assist you. Contact our knowledgeable team for advice and guidance on Certificate of Lis Pendens registrations and related legal matters.