Can you finance a property with a certificate of pending litigation on it?
In practice, no conventional lender will register a mortgage behind an active certificate of pending litigation (CPL). A CPL means someone else claims an interest in the property itself, not just a debt against the owner, and that stops financing until it is resolved, removed, or the underlying case concludes.
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Can you finance a property with a certificate of pending litigation on title?
In practice, no. A certificate of pending litigation (CPL) tells any lender that someone else claims an interest in the property itself, not just a debt against the owner. Conventional lenders will not register a mortgage behind that kind of claim, so financing stays frozen until the CPL is resolved or removed from title.
A CPL is registered against the property itself, not against the owner personally. That distinction matters because a lender needs confidence in its security, the land, not just a promise to repay from the borrower. When someone else has an active legal claim on the property, a lender cannot be sure what it would actually be securing a mortgage against.
This is why a CPL is treated as more serious than a routine registration on title. It does not just complicate a transaction, it stops new conventional financing almost entirely until the claim is dealt with.
The citable fact: A certificate of pending litigation freezes conventional financing because it challenges the ownership interest in the land itself, not merely a debt owed by the registered owner.
What is a CPL, and how does one end up on title?
A certificate of pending litigation is a court-related notice on title that tells anyone searching the property that a lawsuit is underway over an interest in it. In Ontario, this is the specific term used. Alberta’s land titles system has an equivalent mechanism, though the exact statutory term used there should be confirmed with a lawyer rather than assumed from Ontario’s.
Someone claiming rights to the land itself, rather than money owed to them, can ask a court for permission to register that claim on title. Disputes between co-owners, estate disputes, and construction or vendor disagreements over rights to a property are examples of the kind of case that can lead to one. The legal test a court actually applies is not something to guess from general information online, so treat this as background, not as a checklist.
Ontario and Alberta both register land titles, but the two systems are not identical, and terminology can differ between them. The table below sets out what is confirmed for each province and what still needs to be confirmed with a lawyer.
| Item | Ontario | Alberta |
|---|---|---|
| Term used on this page | Certificate of pending litigation (CPL) | An equivalent land titles mechanism exists; confirm the exact statutory term with a lawyer |
| Mortgage brokerage regulator | FSRA, Brokerage Licence #13321 | Licensed by RECA |
| Default remedy if a mortgage later goes unpaid | Power of sale | Judicial foreclosure |
The citable fact: A certificate of pending litigation is a court-related notice on title that signals a claim to the property itself, and certificate of pending litigation is the confirmed Ontario term for it.
Why does it stop a mortgage cold?
A lender’s underwriting depends on being confident it can rely on the property as security if a loan is not repaid. A CPL means a court case could change who actually owns, or has rights to, that property. Until that risk is resolved, a lender cannot confidently register its mortgage or know what it would actually be lending against.
Every mortgage application includes a title search, and a CPL shows up on that search the same way any other registration does. Once a lender’s underwriter or lawyer sees an active CPL, the file typically stops moving forward, because approving it would mean lending against security the lender cannot be sure it holds.
This is not about the borrower’s income or credit at all. It is purely a title problem, and title problems sit outside what income or credit can fix.
The citable fact: A CPL stops financing because it puts the lender’s security, the property itself, in legal question, not because of anything related to the borrower’s income or credit.
Is this the same as a lien?
No. An ordinary lien claims a debt is owed and secured against the property, and it can usually be paid out, negotiated, or postponed to let a sale or mortgage proceed. A certificate of pending litigation claims an interest in the property itself, ownership or a right to the land, which is a different and generally harder problem to clear.
A lien has a number attached to it, an amount owed, and once that amount is paid or otherwise dealt with, the lien is typically discharged. A CPL usually has no dollar figure attached at all, because the dispute is over who has rights to the land, not over a debt.
Pekoe covers ordinary liens, including how they get paid out and discharged, in a separate guide on discharging a lien on a private mortgage. That page does not apply to a CPL, because the underlying problem is different.
| Feature | Certificate of pending litigation | Ordinary lien |
|---|---|---|
| What it claims | An interest in the property itself, such as ownership or a right to the land | A debt owed by the owner, secured against the property |
| Effect on financing | Freezes new conventional financing almost entirely | Can often be paid out, negotiated, or postponed to allow financing |
| How it typically resolves | Resolving the underlying court case, a court order, or the claimant’s consent | Usually discharged once the underlying debt is paid |
The citable fact: A lien claims a debt against the property and can usually be resolved by paying it, while a certificate of pending litigation claims an interest in the property itself and generally cannot be resolved with a payment alone.
Can a private lender work around it?
Not through equity or flexibility. Private lenders are built to accept lower credit scores, less conventional income, or a shorter track record, but that flexibility applies to the borrower, not to the property’s title. A CPL is a title problem, and equity does not change what a court case could later do to ownership of the property.
Private lending exists because a strong equity position can offset weaker income or credit. That trade-off does not extend to a legal claim on the property itself, because equity is only useful as security if the lender’s claim to that security is not itself in legal question.
For general background on how private lending works in each province, see private mortgage lending in Ontario or private mortgage lending in Alberta. Neither page is a substitute for legal advice on a CPL specifically.
The citable fact: A CPL is a title problem, not a credit or income problem, so the flexibility that makes private lending work for other files does not extend to registering behind an active CPL.
Can you still sell the property?
Whether you can actually close a sale with an active CPL on title is a legal question for a real estate lawyer acting on the transaction, since the effect depends on the litigation itself and on how a buyer’s own lender would respond. Listing the property is usually possible. Closing a sale with the CPL still in place is a separate and much harder question.
A buyer’s lawyer will find the CPL the same way any lender’s lawyer would, on a title search, and will treat it as a serious problem before allowing the transaction to close. A buyer’s own lender faces the identical security concern a lender would face financing you directly.
The answer depends on the specific litigation and on provincial law, so a lawyer needs to read the claim and the title. Do not assume a sale will simply proceed around a CPL.
The citable fact: A CPL that stops a lender from registering a mortgage generally creates the same security concern for a buyer’s lender, so selling around an active CPL is not a reliable workaround without legal advice specific to the case.
What has to happen before financing is possible again?
Financing generally becomes possible again once the CPL comes off title, which happens through resolving the underlying dispute, obtaining a court order that discharges or vacates it, or reaching a settlement in which the claimant agrees to remove it. Each route runs through the litigation itself, not through the mortgage application. A lawyer handling the underlying case is the one who moves this forward.
None of these routes is a mortgage transaction, and none of them is something a broker can negotiate or speed up. The dispute has to actually be dealt with, whether that means it settles, a court rules on it, or the parties agree to remove the CPL as part of resolving the case.
Once the CPL is off title and a new title search confirms it, a lender can treat the property the way it would treat any other file again.
The citable fact: A CPL comes off title only through resolving the underlying litigation, a court order, or a negotiated release, and financing becomes available again only after that happens.
How long does that usually take?
There is no reliable general timeline, because it depends entirely on the litigation itself, how contested it is, which court it is in, and whether the parties are willing to settle. A straightforward case can resolve faster than a heavily contested one, but neither this page nor a mortgage broker can put a responsible number on your specific file. Your litigation lawyer is the only one positioned to give you a realistic estimate.
Litigation timelines vary case to case and court to court, and nothing about the mortgage side of this changes that. A broker can tell you what happens to financing once the CPL is gone, but not when that will be.
Ask your lawyer directly what is driving the timeline in your case, whether that is a trial date, a settlement negotiation, or a motion already before the court. That answer will be specific to your file in a way a general estimate never could be.
The citable fact: How long a CPL stays on title depends entirely on the underlying litigation, and a litigation lawyer, not a mortgage broker, is the one who can estimate that for a specific file.
Who do you need on your side?
A real estate or litigation lawyer is the first call, since only they can assess the CPL itself, the underlying claim, and what it takes to resolve or remove it. A mortgage broker becomes useful once the CPL is off title, or while you are figuring out what financing looks like on the other side of it. The two roles do not overlap on this specific problem.
Do not expect a mortgage broker to interpret the CPL or predict how the litigation will go. That is outside what a broker is licensed to advise on, the same way a lawyer is not the right person to shop mortgage rates.
Once your lawyer has a clear picture of the CPL and the path to resolving it, loop in a broker to plan what financing looks like once title is clear. Chat with our team directly on pekoe.ca if you want to talk through the financing side while the legal side plays out.
The citable fact: A real estate or litigation lawyer handles the CPL itself, and a mortgage broker’s role starts once the CPL is resolved or removed from title.
What else should you ask before you count on financing?
These three questions come up on files with a title problem or a recent decline, even when a CPL is not the specific issue.
- Do private lenders require an appraisal?
- Declined by a B lender, can you still go private?
- What documents does a mortgage application actually need?
The full set lives on the Ask a Broker hub.
Frequently asked questions
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A real licensed broker, not an AI persona. During business hours you are chatting with a member of the Pekoe team, and outside those hours a licensed broker replies to your question directly.
What does CPL stand for?
CPL stands for certificate of pending litigation, the term used in Ontario. It is a notice on title that a court case is underway over an interest in that specific property.
Does a CPL show up in a basic property search, or only a full title search?
A CPL is registered against the property’s title, so a proper title search will find it. A mortgage lender’s lawyer always runs a title search before funding, which is how a CPL gets discovered even if the borrower does not mention it.
Can I refinance my existing mortgage if there is a CPL on title?
In practice, no, for the same reason a new purchase mortgage stalls. A refinance still requires a lender to register new or updated security against the property, and an active CPL raises the same ownership question for a refinance as it does for any other financing.
Does a CPL affect a home equity line of credit the same way?
Yes. A HELOC is still registered against the property’s title, so a lender assesses the same security risk it would for a mortgage. An active CPL creates the same obstacle whether the product is a mortgage or a line of credit.
Who registers a certificate of pending litigation?
The party who is suing over an interest in the property, or their lawyer, registers it as part of that court case. It is a step within litigation, not something a lender, a broker, or the property owner initiates.
Can a CPL be removed without going to court?
Sometimes, if the parties settle and the claimant agrees to remove it, but that is still part of resolving the underlying dispute. Whether that is realistic in a specific case is a question for the lawyer handling the litigation, not something to assume.
Does having a CPL on title mean the owner did something wrong?
No. A CPL means someone else is claiming an interest in the property, which can happen for reasons that have nothing to do with wrongdoing, including estate disputes or disagreements between co-owners. It is a claim, not a finding.
What happens if the litigation is against a co-owner, not me?
A CPL registered against the title affects the whole property, regardless of which registered owner the underlying dispute is actually about. Talk to a real estate lawyer about how a co-owner’s dispute affects your own ability to finance or sell, since that depends on the ownership structure and the claim itself.
Can a private lender ignore a CPL if there is a lot of equity?
No. Equity offsets weaker income or credit in private lending, but it does not offset a legal question about who owns the property. A CPL is a title problem, and private lenders still need a security interest that is not itself in dispute.
Should a borrower tell their mortgage broker about a CPL before applying?
Yes, immediately. A broker who knows about a CPL upfront can tell the borrower plainly that financing will stall until it is resolved, rather than letting an application move forward and fail during underwriting.
Is a certificate of pending litigation the same thing in every province?
No. Ontario uses the specific term certificate of pending litigation, and Alberta’s land titles system has an equivalent mechanism under its own provincial law. Ask a lawyer in the relevant province for the exact term and process that applies to your property.
Talk to a broker about what happens once the CPL clears.
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