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Registrations of Cautions on Title- This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.

(March 17, 2020, 1:14 PM EDT) — The registration of a caution on title
can serve two overarching purposes. First, it is a means of providing
notice of one’s interest in a property or charge, and second, it can prevent
the registered owner from dealing with the property subject to the caution
for a limited period.
This article will discuss cautions available under sections 71 and 128 of
the Land Titles Act. As will be explained, s. 71 permits the entry of a
caution on the register to protect an interest in land, but such protection
is not as extensive as that afforded by s. 128.
A caution is registered on title upon receipt of an application under the
Act, where the land registrar is satisfied that the cautioner claims a
proprietary interest in land. Cautions registered under s. 71 of the Act
require a statement by the cautioner authorizing the land registrar to
delete the caution 60 days after registration.
For cautions registered pursuant to an Agreement of Purchase and Sale
(APS), the required statement will permit the land registrar to delete the
caution 60 days from the date of closing, which must be provided. While
the caution cannot be renewed, another caution can be registered if the
closing date in the APS is extended by an agreement.
Cautions authorized by s. 128 of the Act cease to have effect 60 days
after registration — a period which the legislature considered sufficient to
allow a cautioner to initiate an action and register a Certificate of Pending
Litigation (CPL) against title, if necessary.
Registration of a caution on title can be particularly useful where dealings
with a property are expected to become litigious. While a CPL is a tool
which ties up the property for the duration of litigation or until it is discharged by order of the court,
and thus provides longer-term protection than the 60-day shelf life of a caution, a CPL can only be
obtained by court order. Therefore, the registration of a caution can prevent dealings with the land
until a CPL can be obtained.
Proper Registrations
Section 71 cautions are either authorized under the Act or by the Director of Titles, and are generally
available in three circumstances. First, a s. 71 caution may be registered where a creditor claims that
a property has been conveyed with the intention to defeat creditors. Second, s. 71 cautions may be
registered by a property owner challenging power of sale proceedings on the basis that he or she has
redeemed the charge.
Both of these types of caution have been authorized by the Director of Titles. The third type,
authorized under s. 71(1.1) of the Act, allows a cautioner to register their interest pursuant to an
APS. This registration constitutes a taxable conveyance under the Land Transfer Tax Act and requires
payment of land transfer tax.
Section 71 cautions may protect a cautioner’s interest by providing actual notice of an interest in
3/18/2020 Registrations of cautions on title – The Lawyer’s Daily
https://www.thelawyersdaily.ca/articles/18115/print?section=realestate 2/2
land to any person when they are reviewing and relying on title; however, they do not prevent
dealings with the land. On the other hand, after a caution has been registered under s. 128, the land
registrar may not register any dealing with the land that is subject to the caution without the
cautioner’s consent.
Cautions under s. 128 remain limited to proprietary interests such as the right to receive a transfer
or charge. For example, an interest in land granted to a beneficiary under a trust agreement can be
registered under s. 128. A cautioner may also register a caution under s. 128 upon exercising an
option to purchase the land in question.
Beyond the scope of this article are the circumstances in which a purchaser’s lien or equitable
mortgage, both of which have been stated to constitute an interest in land, may support the
registration of a caution on title (2254069 Ontario Inc v. Kim 2017 ONSC 5003; Pan Canadian
Mortgage Group III Inc v. 0859811 B.C. Ltd. 2014 BCCA 113).
Notice to owners
Section 71 states that where a caution is registered, owners are deemed to have notice of an
unregistered interest in land referred to in the caution. There is no requirement in that section for the
cautioner to serve notice on the owner. However, the Act requires a cautioner to serve a copy of a s.
128 caution and a notice containing particulars of its registration on the registered owner of the land,
and on any other person with an interest in it.
Consider purpose before each registration
Under s. 132 of the Land Titles Act, a person who registers a caution without “reasonable
cause” must compensate anyone who suffers damage as a result of that registration. Lawyers should
consider the effects of registration in the particular circumstances in order to avoid adverse financial
consequences for their client.
Additionally, registration requires a statement (or affidavit, for non-electronic registration) by the
lawyer which corresponds to the type of caution being registered. For s. 128 cautions, the lawyer
must state that the applicant is entitled to register a caution to prevent any dealing with the land
without the applicant’s consent and attest to the nature of the applicant’s interest. In making such
statements, lawyers should consider whether the purpose of registration is to preserve a proprietary
interest in a property or charge.
Steven Pordage is a member of the commercial real estate practice at Pallett Valo LLP. His practice
covers all aspects of real estate transactions including land acquisitions, disposition, development
and financing of real property. Katherine Trigiani is an articling student at Pallett Valo LLP, where she
enjoys learning about the practice of commercial real estate. She is a graduate of Osgoode Hall Law
School.

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