A lis pendens, or notice of lis pendens, is an official notification that there is a lawsuit filed asserting a claim on a piece of real estate. This legal notice makes anyone interested in the property aware that they may be bound by the outcome of the pending litigation.
Understanding lis pendens helps you both buy and sell real estate wisely, clearing claims or resolving lawsuits involving your own property before attempting to sell. You also don’t want to be surprised by the liability you may encounter as a new property owner if a lis pendens is active on the property. Learn more about the details, here.
Definition and Examples of Lis Pendens
Lis pendens is Latin for “suit pending,” and is filed to give notice about lawsuits that assert a claim on a particular piece of property. Given the value of property in U.S. culture, homes and land can have liens or claims on them when someone needs to recoup an outstanding debt or for other reasons.
The claims on the property don’t disappear if the property is sold, and they pass with ownership of the land or house. This means that should an individual purchase the property at hand, the new owner would have to face the lawsuit. Therefore, any potential buyers should be notified, via the lis pendens, of the claims against the property they’re considering.
Lis pendens can be filed, for instance, while divorce proceedings are sorted out and a decision is made about the ownership of previously, jointly held property. The most common case where lis pendens is used in foreclosure. The foreclosure process takes about a year in court from when the plaintiff starts a case on the sale of a home. The plaintiff then files papers to the court, as well as a lis pendens in court, in order to warn people that the court case exists on the property.
- Alternate name: Lis pend, notice of pendency
How Does Lis Pendens Work?
Lis pendens is a legal notice that affects a property’s chain of title, or historical record of ownership and claim. If someone believes that a property’s current title doesn’t accurately reflect their claim to some portion or all of the property, they may file for a notice of lis pendens as they sue for a claim to the property.
Since lawsuits take time, lis pendens is a quick way of showing that something is happening with the ownership of the land. It could resolve and be fine, but it could also leave a potential buyer in the lurch.
If, for instance, the percent ownership of a piece of property is in question between Beth and Jeff, Beth could file a lawsuit disputing Jeff’s ownership claim to the property. This could occur in a few different circumstances, such as a contested will or a divorce. The lis pendens notice would become publicly available through a title search, stating that a lawsuit is in process, specifically related to who owns the property.
Potential buyers who understand lis pendens would be wary of Beth and Jeff’s property because if, say, only Jeff is trying to sell it, the sale could fall through or pull the new owner into a legal battle with Beth. If, however, Beth and Jeff settle their differences in court, the lis pendens can be removed and the results of the lawsuit will determine how the property can be sold free and clear.
Types of Lawsuits Prompting Lis Pendens
As previously mentioned, lis pendens are common in contested will property or property that is being divided up in a divorce. It is also very common in foreclosure proceedings, since the process of a lender taking ownership of a property takes time and involves a change in property ownership. In general, lis pendens is only used when there is a legal connection between the lawsuit and the property.
Any other filing involving a claim to ownership or partial ownership of the property may also trigger a lis pendens notice that appears in the property’s chain of title.
Finally, if a property is in the sales process but more than one contract has been accepted, one buyer could file a lis pendens. They would do so because they believe they have a claim from their contract, even though another buyer is proceeding with the sale.
Eventually, the lawsuit will settle who the “bona fide purchaser” or owner is of the property, and the other buyer could have to forfeit the property.
Specific laws and procedures surrounding a lis pendens on property will vary from state to state, so be sure to get familiar with your state’s guidelines prior to buying or selling a home.
What It Means for a Home Sale
If you realize there is a lis pendens on a home you had your eye on, you’re generally better off not purchasing the property at hand. Lawsuits of this nature can often take months or years to come to a resolution, thus, it is considered better to continue your home search rather than waiting for the suit to come to an end.
An attorney can assist you in understanding the information available about the property’s title. In some cases, they may be able to offer assurances that continuing with the sale is not quite as risky as a lis pendens sometimes could mean.
If you are the homeowner whose property has a lis pendens notice on its title, you may be tempted to sell just to avoid the legal process. Generally, however, it’s best to resolve the lawsuit and sell afterward, since it is fraud to sell property that you don’t own, and the lawsuit might not resolve in your favor.
- Lis pendens—translating to “suit pending” in Latin—is a public, legal notice that a lawsuit involving a claim to a property has been filed and not yet resolved.
- Lis pendens adds a note to the title of a property so that anyone who is considering buying it will know that there may be a disputed claim to ownership, which would then be their responsibility to resolve if they bought the land.
- Consulting with an attorney in the case of a particular property’s lis pendens can help you determine whether proceeding with the sale is the best choice for you.