“Lis pendens” is Latin for “suit pending.” It is a written notice that there has been a lawsuit filed in connection with a piece of real estate. A real estate lis pendens notice is a legal notification to potential buyers and lenders of real property that there has been a lawsuit filed concerning that piece of property. The lawsuit might affect whether the owner has the right to transfer ownership of the property.
The purpose of the lis pendens notice is to alert buyers and lenders (or anyone with a mortgage lien or security interest in a piece of property) that any interest that they might acquire while the lawsuit is pending will be subject to the outcome of that lawsuit. The lawsuit is generally one where the plaintiff is asserting a financial or ownership interest to a piece of real property owned by someone else.
The lis pendens notice is public record and is filed with the court and recorded just like a deed in the county office of land records where the real estate is located. Typically, the plaintiff will file the notice at the same time they file the lawsuit containing a real estate related claim. The lis pendens will show up on a title search for the property and will impact whether a buyer will be able to obtain title insurance.
Lawsuits that require filing a lis pendens notice usually involve one or more of the following legal issues:
- Disputes over the title to the property
- Enforcement of a real estate lien
- A request for specific performance with regard to the sale of the property
More specifically, some of the reasons for filing a lis pendens notice include:
- A divorce is pending and the property is one of the assets that will be part of the divorce settlement. Until the parties or the court decide which spouse will own the property and the divorce is finalized, the real estate is subject to the ongoing litigation.
- An heir to an estate who is contesting the will might file a lis pendens if real estate owned by the deceased is at issue.
- Individuals who think they should have been the purchases of a piece of real estate might plan to sue if they feel they were the victims of fraud during the sales process. For example, a buyer and seller enter into a sales contract and the buyer puts down earnest money. Then the seller backs out of the deal for a reason the buyer believes was fraudulent.
- A mortgage lender might file a lis pendens if a property owner has failed to pay their mortgage.
- When a contractor has done work on the property but has not been paid by the owner, they might file a mechanic’s lien. They allege that they have a claim against the property where the work was done.
The lis pendens notice remains part of the public record until the lawsuit is resolved or the property owner is able to expunge or dissolve the lis pendens.
How Does a Lis Pendens Notice Impact the Homeowner’s Title to the Real Estate?
A lis pendens notice is considered an encumbrance or burden on a property’s title. When a buyer enters into a contract to purchase real estate, the buyer or their lender will perform a title search to make sure the title to the property is “free and clear” of any liens, burdens, or encumbrances.
A title search will reveal the existence of the lis pendens notice. The notice is an encumbrance that might decrease the value of the real estate or make transferring its title difficult, particularly when a third party lender is involved. The impact of lis pendens on title is a resulting difficulty to obtain a loan secured by the property (like a mortgage) or for a homeowner to refinance an existing mortgage.
Can a Homeowner Challenge a Lis Pendens Notice?
The owner of a piece of real estate can challenge a lis pendens notice where they believe it is improper. The homeowner must show that the lis pendens does not actually involve a real estate claim.
For example, if the lawsuit involves a homeowner being sued for breach of contract by an independent contractor, such as a repairman, painter, landscaper, etc. The contractor might ask the court for a lien on the property because the owner did not pay them for their services. The homeowner can make the argument that the lawsuit is one for breach of contract asking for damages, and does not actually involve a real estate claim.
A homeowner might also be able to have a lis pendens expunged if they can show that there is little to no evidence that the plaintiff in the lawsuit will be able to establish ownership over the property. They must file a motion to expunge with the court and at the hearing prove that the underlying lawsuit is either not a dispute over the ownership of real property, or is not a valid claim that the plaintiff is likely to win.
In some cases the property owner might be able to show that the lawsuit is frivolous and just meant to harass the owner of the real estate in questions.
How Long Does It Take to Remove a Lis Pendens Notice and How Long Does It Last?
The time it will take to fully remove the lis pendens notice will depend on how long it takes for the court to either decide the merits of the underlying lawsuit, or hear and decide the motion to expunge the lis pendens file by the property owner.
In some cases the owner might be able to ask whoever filed the lis pendens to withdraw it themselves. If a persuasive argument can be made that the lawsuit does not actually involve a claim to the real estate, the plaintiff might agree to withdraw the notice.
In some cases the lis pendens might expire on its own. Once the lis pendens is removed there is no need to repeat the process unless a new lawsuit pertaining to the property is filed or a new lis pendens notice is filed.
Do I Need a Lawyer for Help with a Lis Pendens Notice?
Petitioning the court to remove or expunge a lis pendens notice from your property can be a long and complicated process. A lis pendens notice can have serious financial consequences for a property owner. It may reduce the value of the property and will very likely deter any potential buyers interested in purchasing your home.
They will probably be unable to obtain title insurance or get the financing necessary for the purchase. You may also be unable to take advantage of lower interest rates and refinance your home.
To have the best chance of removing or expunging a lis pendens notice you should consult with a qualified real estate attorney An experienced attorney can advise you regarding the substance of the underlying lawsuit and whether you are likely to be successful with a motion to remove the lis pendens notice. They can prepare the documents for the court and represent your interests at the hearing.