Lis pendens
Encyclopedia
Lis pendens is Latin for "suit pending." This may refer to any pending lawsuit or to a specific situation with a public notice of litigation
that has been recorded in the same location where the title
of real property
has been recorded. This notice secures a plaintiff's
claim on the property so that the sale
, mortgage, or encumbrance
of the property will not diminish plaintiff's rights to the property, should the plaintiff prevail in its case. In some jurisdictions, when the notice is properly recorded, lis pendens is considered constructive notice
to the other litigants or other unrecorded or subordinate lienholders. The term is sometimes abbreviated as "lis pend".
In current practice, a lis pendens is a written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office. Recording a lis pendens against a piece of property alerts a potential purchaser or lender that the property’s title is in question, which makes the property less attractive to a buyer or lender. After the notice is filed, anyone who nevertheless purchases the land or property described in the notice takes subject to the ultimate decision of the lawsuit.
The recording office will record a lis pendens upon request of anyone who claims to be entitled to do so (e.g. because he has filed a lawsuit). If someone else with an interest in the property (e.g. the owner) believes the lis pendens is not proper, he can then file suit to have it expunged.
Some states’ lis pendens statutes require the filer of the notice, in the event of a challenge to the notice, to establish that it has probable cause
or a good likelihood of success on the merits of its case in the underlying lawsuit; other statutes do not have such a requirement.
lis pendens applies in matters of parental responsibility as well.
The harsh effect of this rule, and especially its effect on innocent purchasers (particularly vis-à-vis not-so-innocent sellers), led many jurisdictions to enact lis pendens statute
s requiring a written notice, usually recorded in the land records where the real estate is located, for the notice provisions of the rule to be effective. Typically, a separate recorded instrument is required by statute if the lawsuit in question affects title to real property. If the statutory requirements are met, the world is put on "constructive notice" of the existence of the suit, and any person acquiring an interest later does so subject to the outcome of the suit.
It is important to note that the presence of a lis pendens does not prevent or necessarily invalidate a transfer of the property, although it makes such a transfer subject to the outcome of the litigation. As such, it tends to scare off diligent, reputable lenders and careful buyers. Thus, the owner is not prevented from selling the land for (non-borrowed) cash, pledging it as security for a speculative loan, or giving it away—subject to the outcome of the lawsuit. However, once the lis pendens is recorded, the recipient (a "purchaser" or "grantee pendente lite") would be deemed to have notice of the litigation, and thus would not be a bona fide purchaser, and the title might be regained.
While it is generally thought of in connection with real property (land, buildings, and the like), the doctrine of lis pendens also applies to personal property. Frequently, lis pendens statutes only apply to real property, so the common-law doctrine probably still applies to personal property.
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
that has been recorded in the same location where the title
Title (property)
Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...
of real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
has been recorded. This notice secures a plaintiff's
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
claim on the property so that the sale
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
, mortgage, or encumbrance
Encumbrance
Encumbrance is legal technical terminology for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions. Also, those considered as potentially making the title defeasible are encumbrances...
of the property will not diminish plaintiff's rights to the property, should the plaintiff prevail in its case. In some jurisdictions, when the notice is properly recorded, lis pendens is considered constructive notice
Constructive notice
Constructive notice also known as the Doctrine of Constructive Notice is a legal fiction used in the law of both common law and civil law systems to signify that a person or entity is legally presumed to have knowledge of something, even if they have no actual knowledge of it.-Intellectual...
to the other litigants or other unrecorded or subordinate lienholders. The term is sometimes abbreviated as "lis pend".
In current practice, a lis pendens is a written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office. Recording a lis pendens against a piece of property alerts a potential purchaser or lender that the property’s title is in question, which makes the property less attractive to a buyer or lender. After the notice is filed, anyone who nevertheless purchases the land or property described in the notice takes subject to the ultimate decision of the lawsuit.
The recording office will record a lis pendens upon request of anyone who claims to be entitled to do so (e.g. because he has filed a lawsuit). If someone else with an interest in the property (e.g. the owner) believes the lis pendens is not proper, he can then file suit to have it expunged.
Some states’ lis pendens statutes require the filer of the notice, in the event of a challenge to the notice, to establish that it has probable cause
Probable cause
In United States criminal law, probable cause is the standard by which an officer or agent of the law has the grounds to make an arrest, to conduct a personal or property search, or to obtain a warrant for arrest, etc. when criminal charges are being considered. It is also used to refer to the...
or a good likelihood of success on the merits of its case in the underlying lawsuit; other statutes do not have such a requirement.
lis pendens applies in matters of parental responsibility as well.
History
Under the common law, the mere existence of a lawsuit potentially affecting the title to real property had the legal effect of putting the entire world on constructive notice of the suit; anyone acquiring an interest in real property which was the subject of a pending suit took that interest subject to the litigants’ rights as they might be eventually determined, no matter how much later. In effect, nothing relating to the ownership of the subject matter of the suit could be definitively changed while the suit was pending. Innocent buyers might discover the existence of a lawsuit too late.The harsh effect of this rule, and especially its effect on innocent purchasers (particularly vis-à-vis not-so-innocent sellers), led many jurisdictions to enact lis pendens statute
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
s requiring a written notice, usually recorded in the land records where the real estate is located, for the notice provisions of the rule to be effective. Typically, a separate recorded instrument is required by statute if the lawsuit in question affects title to real property. If the statutory requirements are met, the world is put on "constructive notice" of the existence of the suit, and any person acquiring an interest later does so subject to the outcome of the suit.
Effect
Lis pendens is taken as constructive notice of the pending lawsuit, and it serves to place a cloud on the title of the property in question until the suit is resolved and the notice released or the lis pendens is expunged. Reputable, careful lenders will not lend money on the security of land which is subject to a lis pendens, as title insurance companies will not insure the title to such land: title is taken subject to the outcome of the lawsuit. Because so much real property is purchased with borrowed money, this largely keeps the owner from selling the property. It also may keep the owner from borrowing money secured by the property (such as to pay the costs of defending the suit). Similarly, careful buyers will be unwilling to purchase the land, at least not at what the full value would be without the cloud on title.It is important to note that the presence of a lis pendens does not prevent or necessarily invalidate a transfer of the property, although it makes such a transfer subject to the outcome of the litigation. As such, it tends to scare off diligent, reputable lenders and careful buyers. Thus, the owner is not prevented from selling the land for (non-borrowed) cash, pledging it as security for a speculative loan, or giving it away—subject to the outcome of the lawsuit. However, once the lis pendens is recorded, the recipient (a "purchaser" or "grantee pendente lite") would be deemed to have notice of the litigation, and thus would not be a bona fide purchaser, and the title might be regained.
While it is generally thought of in connection with real property (land, buildings, and the like), the doctrine of lis pendens also applies to personal property. Frequently, lis pendens statutes only apply to real property, so the common-law doctrine probably still applies to personal property.