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There are many instances in which an individual who has an interest, or a claim to an interest in land may wish to preserve their interest by temporarily preventing or blocking any dealings or conveyances involving the land. Such claims of an interest in the land may arise for different reasons and are typically contentious and also potentially litigious in nature.

The Land Titles Act (LTA) provides for a mechanism which enables those with various interests in land to register a “Caution” on title to the land, to temporarily prevent future dealings with the land and in turn, prevent the interest from being reduced or lost altogether. “Dealings” with land refers to any conveyance (transfer of ownership) or registration of an encumbrance (such as a mortgage). It is important to note that the registration of a Caution is not a long-term solution to protect interests in land as this mechanism is time-limited by the LTA. The registration of a Caution on title is a temporary measure pending the resolution of any related contentious matter with the owner of the property, or any related litigation.

The registration of Cautions on land is governed by sections 71, and 128-133 of the LTA. These sections set out the different types of Cautions that may be registered, some of which act to prevent any actual dealings from taking place, while some simply provide notice of an interest to anyone searching the title and do not have the effect of preventing dealings. The type of caution that is registered will depend on the specific circumstances, and it is important for the cautioner to obtain legal advice on the appropriateness of registering any given type of Caution on the land.

Section 71 Cautions under the LTA may be registered for one of the following reasons:

• An individual wants to preserve their rights under an Agreement of Purchase and Sale
• A claim by a creditor that the property has been conveyed with the intention to defeat creditors
• A claim by the registered owner that power of sale proceeds are improper (the owner redeemed the mortgage prior to a sale of the property)

Registrations of Cautions under section 71 will not prevent dealings with the land. They will serve only as notice of the interest on title. Furthermore, the Caution must contain a statement authorizing the Land Registrar to delete the Caution 60 days after registration, and specifically in the case of a section 71 Caution registered for the purposes of preserving rights under an Agreement of Purchase and Sale, 60 days after the date of closing, which date must be included as part of the statement. Land transfer tax may also be payable on certain types of Caution registrations under section 71.

Section 128 Cautions under the LTA may be registered if the cautioner has a “proprietary interest”. This means that due to the specific circumstances they have a right to receive a transfer or charge (mortgage). Section 128 Cautions, like section 71 Cautions, will expire 60 days from registration. The main difference between section 128 Cautions and section 71 Cautions is that section 128 Cautions will effectively prohibit and block any dealings from taking place on the title to the land during the 60 day period in which it is active.

It is important for cautioners to be aware of section 132 of the LTA. It provides that a person who registers a Caution without reasonable cause is liable for any damages sustained due to the registration. Therefore, it is important to consult with a lawyer to determine whether the registration of a Caution is appropriate in the given circumstances.

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Reem Haroon is an Associate Lawyer at Kormans LLP. You can reach Reem at rharoon@kormans.ca. The information and comments herein are for the general information of the reader and are not intended as advice or opinion to be relied upon in relation to any particular circumstances. For particular application of the law to specific situations, the reader should seek professional advice. Kormans LLP cannot be responsible for the content of other sites. We expressly disclaim all liability with respect to actions taken or actions not taken based on content received from a third party website linked, directly or indirectly, to that of Kormans LLP.  The link to another site is not to be construed in any way as an endorsement of the host, the site or the information contained therein, nor is such link to be inferred as an association or affiliation with the host.