Lis pendens, Latin for “suit pending,” is written notice that a lawsuit has been filed which concerns the title to, or interest in, a specific parcel of real property [1]. The notice alerts potential lenders or buyers that the title to the property has come into question because of the pending legal action [2].
In many states, lis pendens notices are governed by statute. As such, the party serving notice needs to adhere to the requirements as demanded by the statute or the notice is invalid. Even in jurisdictions where lis pendens is a common law doctrine, many disputes concern whether the notice is sufficient for any technical effect [3]. Take time to understand the rules, and speak to an attorney for clarification.
Anyone who purchases or takes an interest in property after a lis pendens is entered into the public record takes their interest subject to the lis pendens [3]. The inherent risk often discourages people from purchasing the property (always get a title search!) because mortgage companies are reluctant to extend financing for what amounts to real estate with a clouded title. The owner’s ability to sell the land, despite the pending suit, varies by state, so confirm the rules and procedures with an attorney and/or the court.
A notice of lis pendens is only available after initiating a valid claim (lawsuit) against the title to real property. The claim might relate to a foreclosure, a divorce, or something else, but in many cases, it involves a contractor suing to enforce a recorded claim of lien. Note, however, that the lis pendens must refer ONLY to the property identified in the suit. For example, a contractor may have a legitimate claim to place a lien against the owner, but only on the property where the contractor completed the project; if the owner has multiple parcels of land, the notice should not mention them. The court may penalize the individual or entity filing a spurious (invalid) lis pendens, and that party may be obligated to pay attorney’s fees, court costs, and/or other penalties, as deemed appropriate by the court [1].
Typically submitted to the local recording office, the document must identify the parties, the subject property, and information about the lawsuit, including the court, case number(s), relevant dates, and other information as needed for the situation. The form may also be required to meet the state and local standards for recorded documents. Contact the agency responsible for maintaining land records with questions about filing the lis pendens.
Once a lis pendens is filed, what about removing it? The process varies by state, but in general, removal happens one of two ways: expungement (removal) or withdrawal. Expungement requires a judicial directive to cancel the notice. The judge’s order gets recorded, according to state and local requirements, and anything else necessary for the specific situation. For withdrawal, the party who filed the original notice completes and records a document that officially withdraws the complaint [4].
The notice of lis pendens is a useful tool for protecting contested property interests, but it can be tricky. Please contact an attorney with questions about using lis pendens, or for any other issues related to real estate.
[1] http://dictionary.law.com/default.aspx?selected=1172
[2] https://www.legalmatch.com/law-library/article/lis-pendens-notice.html
[3] https://www.faegrebd.com/en/insights/publications/2015/8/four-things-to-know-about-lis-pendens
[4] http://www.kinseylaw.com/clientserv2/civillitigationserv/realestate/lispendens/lispendens.html