What is “lis pendens” and how could it affect you?

What is “lis pendens” and how could it affect you?

| May 4, 2021 | Special Proceedings |

Lis pendens is the Latin term for “a [law]suit pending.” You might also see its abbreviated form as “lis pend” with or without the italics. It serves as formal notification to all that there is ongoing litigation regarding a specific piece of property. This could stem from a divorce, a foreclosure, a contract dispute or any number of other legal situations.

Both the property’s owner and the intended purchaser can face adverse consequences of a lis pendens. The former, because few buyers will want to take on the legal liabilities of the property and the latter because to purchase the property, it is just that legal liability that they will assume upon purchase.

How is lis pendens resolved?

In the case of a divorce, lis pendens litigation can be resolved once the property settlement portion of the divorce process has successfully been resolved between the former spouses (and often the mortgage holder of the property). It should be noted that many high-asset divorces and property settlements can take years to settle, so if this is a property you intended to purchase, you may want to continue your search for other real estate.

Contract disputes in real estate transactions can involve a lis pendens if one buyer signs a purchase agreement yet the seller allows a second buyer to purchase the property. The initial buyer can go to court and file a lis pendens and stop the sale until the court makes its ruling. If the sales have transpired already and the buyer loses to the initial buyer with their valid purchase agreement, the headache they then face is to recover their money from the seller.

What you can do

Regardless of your position in a lis pendens case, when there is one pending, you need solid legal advice to avoid making the wrong move.