The real estate market is littered with confusing terms that can turn someone away from buying a property. One of the terms people might not be familiar with is lis pendens. A lis pendens is a term a lawyer uses for a pending lawsuit related to the title of a property. The term is Latin for “a suit pending.”
Lis pendens is a document that indicates someone has filed a lawsuit on a specific property. Once the court has received notice, it is then certified and committed to record by the county recorder. When a lis pendens is filed, it must specify the exact property, the individual involved, and the relief sought for the property.
One of the biggest filings of a lis pendens happens because of lender foreclosures, but they can also be filed for short sales and other real estate sales. When a lender starts the steps of the foreclosure process, one of the first things they do is file a lis pendens. This alerts the owner of the property that the property is under dispute and the lender is attempting to seize ownership as collateral for the loan that the borrower has defaulted on. Most creditors whose debt is waged against a piece of real estate may also file lis pendens.
While a lis pendens can be filed during the foreclosure process, it can also be filed when someone believes that a title of the property belongs to someone. In these cases, there is a motive to prove ownership before the property can eventually be sold. The sale helps bind the defendant to the property until ownership is settled.
While a property with a lis pendens filed against it can still be purchased, many buyers walk away because of the complicated title transfers and the difficulty of getting a mortgage on the property. A sale of the property in question does not impact the lis pendens in any way, but the property will be at the mercy of the court until the matter is settled.
With any real estate filing, a lis pendens can both help and hurt individuals. The filing stays active until it has been cleared by repayment or the property is foreclosed upon. Knowing if a property has a lis pendens against it becomes useful when alerting potential buyers of issues with the property they are looking to purchase. When considering new real estate, always complete a title check before proceeding with the purchase of a property to know of any known issues with the title.