The Latin term lis pendens translates as “pending proceedings.” This legal term refers to a written notice of a civil action concerning ownership or a shareholding in a specific real property registered on the property. This notice serves as a constructive warning to anyone interested in purchasing the property. Lis pendens indicates there is a pending process that may affect the property. To explore this concept, consider the following definition of lis pendens.
What is Lis Pendens?
Known as “pending certificate of litigation” in some jurisdictions, a lis pendens is a warning that a lawsuit has been filed in a civil court. The litigation may affect the title or property of a property. The lis pendens is registered with the county real estate registrar, effectively giving notice to anyone who might be considering purchasing ownership of the pending case. The notice informs an interested buyer that if he purchases the property with the action pending, his estate will be subject to the litigants. However, the action is decided no matter how long after the property is purchased.
While many Latin terms are left behind in favor of using plain English in legal writings, lis pendens is a real document by that title in many jurisdictions. A lis pendens is usually filed by the plaintiff in a lawsuit, although it may be submitted by a defendant filing a counterclaim.
When is a Lis Pendens used?
Lis pendens is often presented in divorce cases where the distribution of real estate has not been settled. It is particularly common in instances where a property is listed under a spouse’s name, and the other spouse searches for a portion of the asset. The spouse whose name is on the title would have difficulty selling the property under pending litigation.
I spend almost always used by creditors who have submitted a default notice to a defaulting debtor. Banks use the procedure to warn the public that property in foreclosure. Other types of lenders whose debt is secured by a property may also be foreclosed on a property. This usually occurs when a homeowners association initiates foreclosure fees.
It is not uncommon for lis pendens to arise in cases of contractual disputes, where a buyer feels unfairly excluded from buying a home. For example, if buyer A and a seller enter into a contract to sell a home and the seller decides to sell the house to buyer B, buyer A can sue the seller to enforce the sale. The buyer can file a lis pendens, making it difficult for the seller to sell the house. If Buyer B proceeds with the purchase and the courts determine that Buyer A has the right to enforce the sale, Buyer B loses ownership to Buyer A and must go to the seller to recover his money.
What types of lawsuits allow lis pending the filing?
The lis pendens cannot be registered with the county registrar for any lawsuit in which any underlying event relates to real property. Lis pendens can be filed when the lawsuit is seeking relief associated with this real estate. An action seeking monetary damages, without any aid directly related to the property or interest in the park itself, is not appropriate for a lis pendens. Situations, where a lis pendens is necessary, may include a lawsuit to:
- Specific execution of property contract
- Establishment of title by adverse possession
- Deed cancellation
- Relief related to a physical condition of the property
Mark Painter installs new plumbing at John’s house. John is unhappy with the labor bill, which is $ 3,500 for parts and labor. After a month, when John didn’t pay, Mark files a lawsuit to enforce a mechanic’s warranty, asking for the full amount of the bill, plus interest. He then records a lis pendens on John’s property.
Since Mark claims to ask the judge to grant money to compensate him for his work, and it has nothing to do with ownership of the property itself, a lis pendens is not appropriate. If John disputes the lis pendens, since it ties the title to his property, the court will likely find it invalid and expire. In such misunderstandings, it is unlikely that the perpetrator will be penalized for recording the warning.
• Effect of a Lis Pendens
Once a lis pendens has been registered with the county registrar, any person or entity that purchases the property is tied to the results of the pending action. Technically, lis pendens do not prevent the sale of the property on which it was registered. However, in practice, potential buyers, financiers, and bond insurers are hesitant to purchase a property that could later be adversely affected by the company. Process pending.
• Expunging a Lis Pendens
The lis pendens remain in effect until the court has rendered a judgment on the action for which it has been filed or the case is settled. A lis pendency has the potential to tie the title to the property for a very long time. Also, the notice itself is likely to remain attached to the property until a lis pendens order has been filed and registered.
Expunging a lis pendens can be accomplished by one of three methods:
- Show the court that the action does not affect the title or possession of real property subject to lis pendens.
- Show the court that the plaintiff filed the motion in bad faith. This requires showing that the plaintiff does not believe he had a valid claim at the time he filed the lawsuit.
- Show the court that the action has been dismissed for misuse. This requires demonstration that the action was brought solely to deprive the owner of the property of the use of the property was filed primarily out of a will or was filed to force an unrelated settlement—underlying claim in the lawsuit. In the absence of an agreement or judgment, the property owner may apply to the court for exemption from lis pendens. The property owner may use any of the above grounds. An expungement can only be registered with the county registrar by court approval.
Mary is upset that her ex-husband, James, owes her more than $ 3,000 in alimony, and is making no effort to pay it, although she earns a substantial salary. Mary learns that James is planning to sell the house, and decides to record a lis pendency on the house that her ex-husband received in divorce, hoping that James will pay her in return for taking the pending property.
For lis pendens to be (removed), James only has to show the court that Mary has filed lis pendens only to force him to pay her money that has nothing to do with the property. Once the court has issued an order to eliminate lis pendens, James must take it to the county recorder for the notice to be removed. In this case, the judge is likely to penalize Mary for her actions.
Lis-pendens is a useful feature when used correctly and one that parties are using most often and in new contexts. Construction and real estate professionals regularly work on issues and disputes regarding lis pendens notice every day and in many jurisdictions.