what is notice of pendency

Natashya

3 min read

·

26-12-2024

1

0

Share

A Notice of Pendency, often called a "lis pendens" (Latin for "litigation pending"), is a formal legal notice filed in a court of law. This notice informs the public that a lawsuit affecting a specific property is underway. It essentially creates a "cloud" on the title of the property, making it more difficult to sell or refinance. Understanding what a lis pendens is and its implications is crucial for anyone involved in real estate transactions.

How Does a Lis Pendens Work?

The lis pendens is filed with the county recorder or other relevant government office where the property is located. This public filing puts everyone on notice that a legal dispute is pending that could significantly impact the property's ownership or use. The notice typically includes:

• The names of the parties involved in the lawsuit. This includes the plaintiff (the person filing the suit) and the defendant (the property owner or other interested party).
• A legal description of the property. This ensures there is no confusion about which property is affected.
• The court where the lawsuit is pending. This allows anyone interested in learning more to locate the relevant court documents.
• A brief summary of the nature of the lawsuit. This gives a general idea of the legal dispute's subject matter.

What Types of Lawsuits Result in a Lis Pendens?

A lis pendens can be filed in various legal disputes involving real estate, including:

• Foreclosure: When a lender initiates foreclosure proceedings, a lis pendens is often filed to alert potential buyers that the property may be sold to satisfy a debt.
• Quiet Title Actions: These lawsuits aim to clarify ownership claims and resolve title disputes. A lis pendens is used to protect the plaintiff's interest while the court determines ownership.
• Mechanic's Liens: If a contractor or subcontractor isn't paid for work performed on a property, they can file a mechanic's lien and a lis pendens to secure their claim.
• Boundary Disputes: When there is a disagreement about property boundaries, a lis pendens can be filed to protect each party's claimed interest.
• Partition Actions: If multiple people own a property and can't agree on how to manage it, a partition action might be filed to divide the property. A lis pendens protects the property during this process.

The Impact of a Lis Pendens on Property Transactions

The existence of a lis pendens significantly impacts a property's marketability. It creates uncertainty for potential buyers and lenders:

• Difficulty Selling: Buyers are often hesitant to purchase a property with a lis pendens because of the potential legal complications and uncertain outcome of the lawsuit.
• Challenges in Obtaining Financing: Lenders are wary of lending money on a property with a pending lawsuit, as the outcome could affect the property's value or ownership.
• Title Insurance Complications: Title insurance companies carefully examine the title for any clouds, including lis pendens. This can delay the closing process and increase the cost of insurance.

How is a Lis Pendens Removed?

A lis pendens is typically removed when the underlying lawsuit is resolved. This can happen in several ways:

• Settlement: The parties involved reach an agreement, and the lawsuit is dismissed.
• Judgment: The court renders a decision, and the case is concluded.
• Dismissal: The plaintiff decides to withdraw the lawsuit.

In some jurisdictions, the court may require a motion to expunge (remove) the lis pendens if it's determined to be improperly filed or no longer relevant. This process often requires a court hearing.

Seeking Legal Advice

Navigating the complexities of a lis pendens requires careful consideration. If you are involved in a lawsuit that might result in a lis pendens, or if you are considering buying or selling a property with a lis pendens, consulting with a real estate attorney is crucial. They can provide guidance on your rights and options and help you protect your interests.

Disclaimer: This article provides general information and should not be considered legal advice. Always consult with a qualified legal professional for advice tailored to your specific situation.