Lis Pendens
Definition
Lis Pendens is a Latin term meaning “suit pending.” In legal parlance, it refers to a notice filed in the public record to inform all interested parties that a lawsuit has been initiated which concerns the property’s title. This legal notice effectively warns potential buyers or interested entities that the property is currently subject to litigation, and any interests acquired in the property will be subject to the outcome of the lawsuit.
Examples
- A homeowner files a lawsuit against a neighbor claiming a boundary encroachment. To safeguard its claim, the homeowner files a lis pendens to notify others of the ongoing litigation concerning the property boundaries.
- In a divorce proceeding, if one spouse claims ownership interest in real estate held by the other, they may file a lis pendens to prevent the property’s sale or transfer until the lawsuit is concluded.
- A lender initiates foreclosure proceedings and files a lis pendens to announce its claim on the property, deterring any third-party buyer until the foreclosure lawsuit is resolved.
FAQs
Q1: What happens if I buy a property with a lis pendens notice?
A1: If you purchase a property that has a lis pendens notice, you acquire the property subject to the outcome of the lawsuit. You could potentially lose your interest in the property or face enforceable judgments related to the litigation.
Q2: How long does a lis pendens last?
A2: A lis pendens remains in effect until the lawsuit is resolved or the court orders its removal. Once the legal proceedings conclude, the lis pendens can be removed from the public record.
Q3: Can a lis pendens be wrongfully filed?
A3: Yes, there can be instances of wrongful filing of a lis pendens. If proven to be without merit, the wronged party may seek legal remedies, including its removal and potentially claiming damages.
Q4: Is a lis pendens the same in all jurisdictions?
A4: The rules governing lis pendens can vary significantly between jurisdictions. It is important to consult local legal standards and procedures.
- Decree: An official order issued by a legal authority as a resolution to the litigation, indicating the rights and duties of the parties involved.
- Judgment: The formal decision made by a court following a lawsuit, establishing the legal obligations of the parties.
- Encumbrance: Any claim against property, such as liens, easements, or restrictions, that may affect its transferability.
- Foreclosure: The legal process by which a lender takes control of a property from a borrower who has defaulted on the loan agreements.
Online References
Suggested Books
- “Property Law: Cases and Materials” by Robert C. Ellickson, Charles M. Haar, and Benjamin A. Starr
- “Real Estate Law” by Robert J. Aalberts
- “Essentials of Real Estate Law” by Lynn T. Slossberg
Fundamentals of Lis Pendens: Real Estate Law Basics Quiz
### What does the term lis pendens mean?
- [ ] Lawsuit resolved
- [x] Suit pending
- [ ] Property foreclosure
- [ ] Title certified
> **Explanation:** The Latin term "lis pendens" translates to "suit pending," indicating that there is an ongoing lawsuit concerning the property.
### What is one of the purposes of filing a lis pendens?
- [ ] To finalize the property’s title.
- [ ] To signal completion of property appraisal.
- [x] To notify potential buyers of pending litigation.
- [ ] To record a judgment's satisfaction.
> **Explanation:** Filing a lis pendens serves to alert potential buyers and interested parties of an existing legal dispute affecting the property.
### Can you remove a lis pendens before the lawsuit is resolved?
- [ ] Yes, anytime by petition.
- [ ] No, it is permanent.
- [x] Yes, but typically only by court order or settlement.
- [ ] No, it lasts 10 years minimum.
> **Explanation:** A lis pendens generally remains until the lawsuit is resolved. Its early removal usually requires court intervention or settlement between parties.
### Who typically files a lis pendens?
- [ ] The property trustee.
- [ ] The buyer.
- [x] A party involved in litigation concerning the property.
- [ ] A real estate agent.
> **Explanation:** A lis pendens is generally filed by a party engaged in a lawsuit that involves the property's title.
### Where is a lis pendens filed?
- [ ] At the construction office.
- [ ] With a local bank.
- [x] In the public land records.
- [ ] At a real estate broker’s office.
> **Explanation:** A lis pendens is filed in the public land records to effectively notify any potential parties of the pending litigation.
### How does a lis pendens affect property sale?
- [x] It deters buyers until the dispute is resolved.
- [ ] It increases the property’s market value.
- [ ] It accelerates the closing process.
- [ ] It has no effect on sales.
> **Explanation:** A lis pendens alerts potential buyers of pending litigation, usually deterring them until the matter is resolved.
### What happens to the lis pendens if the lawsuit is dismissed?
- [ ] It automatically turns into a title deed.
- [ ] It converts to an equity lien.
- [x] It is typically removed from public records.
- [ ] It remains permanently for 10 years.
> **Explanation:** If the lawsuit is dismissed or resolved, the lis pendens is typically removed from the public record.
### Which of the following best describes why a lis pendens can be critical?
- [ ] Indicates financial health of the seller.
- [x] Alerts interested parties to a legal claim.
- [ ] Certifies property free from disputes.
- [ ] Enhances property’s taxable value.
> **Explanation:** A lis pendens serves as a crucial alert to potential investors or buyers that a property is under legal dispute.
### If a lis pendens warns of a lawsuit, what must buyers consider?
- [ ] Immediate property acquisition.
- [ ] Ignoring encumbrances.
- [x] Legal and financial risks involved.
- [ ] Sealed transaction records.
> **Explanation:** Buyers must recognize the significant legal and financial risks associated with acquiring property subject to a lis pendens.
### What is a possible consequence for wrongly filing a lis pendens?
- [ ] Enhanced property value.
- [x] Legal penalties and potential damages.
- [ ] Automatic lawsuit win.
- [ ] Guaranteed court order.
> **Explanation:** Wrongful filing of a lis pendens can lead to legal penalties, including the potential for damages being awarded to the wronged party.
Thank you for delving into fundamentals of Lis Pendens and tackling our informative quiz questions. Keep enhancing your proficiency in real estate law!
