Clearing title

How BC law treats it

BC uses a Torrens land title system under the Land Title Act, RSBC 1996, c 250. The register is the source of truth: under s. 23(2), an indefeasible title is conclusive evidence that the registered owner is entitled to the land, subject to listed exceptions. Under s. 23(3), possession cannot defeat a registered title, and s. 24 abolishes acquiring rights by prescription. Because the register governs, BC has no US style quiet title procedure. A party with a genuine ownership claim can sue in the BC Supreme Court for a declaration and an order directing the registrar. Most title clearing is practical. Paid off mortgages are removed by a discharge from the lender, which the seller's lawyer or notary registers. Expired or spent charges may be cancelled by application to the registrar where the Land Title Act allows. A builders lien registered under the Builders Lien Act, SBC 1997, c 45 can be removed by posting security in court so the lien attaches to the money instead of the land (s. 24), or by applying to cancel a lien that has expired or is frivolous or abusive (s. 25). A lien expires if the claimant does not start an action and register a certificate of pending litigation within one year of filing (s. 33). A certificate of pending litigation is registered under Part 14 of the Land Title Act, and the cancellation provisions are in Part 16 (ss. 252 to 257). On application, the BC Supreme Court can cancel it, for example under s. 256 where the owner shows hardship and inconvenience, usually on terms that security be posted, or under s. 252 where no step has been taken in the action for one year. The court can also cancel it where the pleading does not claim an interest in land.

What it means for your business

A charge on title can stop a sale or refinancing until it is cleared, and lenders will not advance funds against a clouded title. Developers and sellers should search title early, line up discharges well before completion, and budget time for court applications to remove liens or certificates of pending litigation. Owners facing a lien can often clear title quickly by posting security, keeping a project or sale on schedule while the underlying dispute continues. Example: A North Vancouver developer's refinancing stalls when a subcontractor files a $90,000 builders lien. The developer pays security into court under the Builders Lien Act, the lien is cancelled, and the loan funds while the debt is litigated.

Risks and common mistakes

Assuming a US style quiet title action is available, or that long occupation can defeat the registered owner. Leaving title searches and discharge requests until days before completion. Ignoring a builders lien in the hope that it will expire, when the claimant may still start an action within one year. Treating an expired lien as gone without applying to have it removed from title. Forgetting that a certificate of pending litigation can be cancelled on posting security.