what is certificate of pending litigation

The real estate market has stood out to be one of the most profitable industries of the world at large. With all of its market trends and high-figure deals, there are no doubts about the success rate.

Having created a lot of jobs and business opportunities around its market, it is only fair to say that investing in real estate properties is still one of the most reliable ways of wealth creation. Sadly, most new investors have lost their fortunes to the lack of proper knowledge or misinformation.

Buying a property with litigations is one easy way to watch your fortunes go down the drain. Hence, it is very important for property investors to understand the practical meaning of litigation and what it implies on a property.

Knowing these implications will surely serve as a guide to deciding whether or not to invest in a property.

READ: Is Burning Money Illegal? Answer 

THE OVERVIEW OF LITIGATION

Litigation is the process of initiating legal action in a court of law. This could be done by raising a claim or lawsuit against a person, group of persons, or company before a court of law. It also includes all the approaches taken during the lawsuit and the plans for resolving the case.

The steps to a lasting resolution may include filing a complaint, serving legal documents to the other party, investigating to gather more evidence, arguing the case in court, and appealing the decision if need be.

UNDERSTANDING LITIGATION ON A PROPERTY

Property litigation suggests an arm of law whose primary assignment is to resolve disputes involving rental properties. Oftentimes, these conflicts are between the supposed property owners and their tenants.

Extensively, you can also find cases around sales, leases,s and renting of a property. Hence, pending Litigation on rental properties is the condition in which a property is having an unresolved legal case in the court of law, mostly against the supposed property owner.

WHAT IS A CERTIFICATE OF PENDING LITIGATION

The certificate of pending litigation is documentation made available by the court to prove that there exists a lingering legal proceeding or lawsuit on a particular property of interest.

This implies that there are issues surrounding a certain real estate property, as such, legal warnings are publicly made available to educate intending investors on all relevant information on the property they want to buy or lease.

The certificate often includes the necessary details of the pending litigation, alongside the parties involved in the dispute and the nature of the legal dispute.

It is important for potential buyers or lenders to be aware of any pending litigation involving a property they are considering purchasing or lending on, as it can affect the value of the property.

HOW TO GET A CERTIFICATE OF PENDING LITIGATION

Obtaining a certificate of pending litigation on a property (Land) solely depends on if and only if an existing order from the court of law approves a party’s claim of a pending triable issue surrounding a said property.

As a result, there are a number of determinant factors considered before a certificate of pending litigation can be approved. The following factors will be considered with clarity in order to approve a claimant’s motion of interest on a property.

READ: Is Public Utility A Good Career Path? Right Answer

  • The court will investigate if the property (land) is unique;
  • The purpose for which the involved parties want to purchase the property.
  • If there exists any relative claim for damages on the property.
  • How simple it appears to calculate the level of damages.
  • If the damages would give an acceptable solution.
  • Whether there exist intending buyers interested in the property.
  • The level of possible harm, suppose the certificate of pending litigation was discharged with or without providing security.
  • If the interest of the claimant applying for the certificate of pending litigation will be protected by any other form of security

Suppose, the factors did not meet the criteria, the certificate of pending litigation stands a significant chance of disapproval by the court.

DISCHARGE OF A CERTIFICATE OF PENDING LITIGATION

Discharging or removing a certificate of pending litigation is the opposite of informing the public that a property of interest has an unsettled legal case.

A certificate of pending litigation (CPL) is often discharged immediately when the litigation or legal claim on the property is completely resolved by both parties (Claimant/Defendant).

Furthermore, the defendant can also discharge a CPL, if they can prove beyond doubt, the non-existence of triable issues surrounding the property of interest. On this note, the Court is obligated to fact-check if the following criteria were met, in order to decide whether or not to discharge the CPL

  • The level of possible harm, suppose the certificate of pending litigation was discharged with or without providing security. Whether the interest of the claimant applying for the certificate of pending litigation will be protected by any other form of security.
  • Whether there exists any relative claim for damages on the property.
  • How simple it appears to calculate the level of damages.
  • Whether the damages would give an acceptable solution.
  • Whether there exist intending buyers interested in the property.
  • If the claimant is a shell corporation
  • The court will investigate if the property (land) is unique;
  • The purpose for which the involved parties want to purchase the property.

READ: What Does A PCOS Belly Look Like?

FINAL THOUGHTS

Having come to terms with litigation, and what it implies on a property, it is important to give credit to the certification of pending litigation whose sole responsibility is to save real estate investors from purchasing properties that have some unresolved legal claims.

Informing the concerned public about these underlying lawsuits is a way to save them from investing fortunes in properties they won’t be able to sell or lease out for profits unless the claims are resolved.

As a matter of concern, always do your due diligence before closing any real estate deal, even if you may wish to purchase a property with pending litigation, it is only right you are aware of the litigation and the simplest approach to resolve it.

Leave a Reply

Your email address will not be published. Required fields are marked *