In many situations, you might want to alert others that you have a stake in a property, even if you’re not the registered owner. This can be accomplished by registering a Caution on title. A Caution alerts others that the property may have a legal claim against it, which could deter transactions or dealings with the land.
Registering a Caution is straightforward. You don’t need a court order to do so, and removing it is typically easy. Because of this, they are an effective choice when there’s a pressing need to safeguard a property. However, remember they are short-term and expire after 60 days.
The Land Titles Act (the LTA) governs the registration of Cautions. For instance, under section 71 of the LTA, Cautions can be used to guard the rights of someone buying a property, a registered owner facing power of sale proceedings from a lender, or a creditor.
Under section 128 of the LTA, you can register a Caution if you have specific rights to the property. For example, if someone has promised you a property in their Will or if there’s a verbal agreement about who owns the property. Such Cautions stop any dealings with the property’s official records, preventing the registered owner from selling or mortgaging it. These specific Cautions cannot be extended indefinitely, but the Director of Titles may allow another registration.
Though Cautions can be very helpful, be careful. Only register one if you have a valid reason. According to section 132 of the LTA, anyone who registers a Caution without a solid reason could be responsible for any damages caused by the registration.
A case that highlights this is Mendes v Mendes, 2020 ONSC 5205. Myra Mendes put a Caution on a property owned by her brother, Myles, which delayed its sale for around two months. Myra said she had a stake in the property because she loaned Myles money to buy it. The court ruled that just giving a loan didn’t grant her property rights for registering a Caution under the LTA. On top of that, Myra was found at fault since the Caution didn’t show the correct loan amount. The consequence for Myra was a total of $51,251.01, comprising $21,251.01 in damages and $30,000.00 in costs and disbursements.
If you believe you should register a Caution on a title, talk to a lawyer as soon as you can – timing can be crucial. If you have a Caution on your property title that you’d like to remove, we can help with that too. Our skilled team at Northern Law LLP is here to help protect your rights. Need reliable legal advice? Reach out to us at (705) 222-0111 or drop us an email at info@northernlaw.ca.