What is Lis Pendens & How Does it Affect your Property?
Lis pendens, which is Latin for "pending lawsuit," is a legal notice filed with the county recorder's office that indicates there is a pending lawsuit related to a particular piece of real estate. The notice serves as a warning to potential buyers or lenders that the property's title is in dispute, and that there is a possibility that the property's ownership or title may be affected by the outcome of the lawsuit.
When a lis pendens is filed, it becomes a matter of public record and can be accessed by anyone interested in purchasing or financing the property. In most cases, a lis pendens will make it difficult or impossible to sell or refinance the property until the underlying legal dispute is resolved.
Examples of situations where a lis pendens may be filed include disputes over ownership of the property, disputes over the validity of a mortgage or lien on the property, or disputes over zoning or land use regulations.
To resolve a lis pendens, the underlying legal dispute must be resolved. This could involve a court ruling, a settlement agreement between the parties involved, or another resolution that is acceptable to all parties.
As a buyer, there are several steps you can take to ensure that you are safe when purchasing a property with a lis pendens:
Conduct a Title Search: A title search will reveal any liens, encumbrances, or other claims on the property. This can help you determine the extent of the legal dispute and whether it is likely to be resolved in your favor.
Consult with a Real Estate Attorney: A real estate attorney can review the lis pendens and help you understand the potential risks and how they may affect your purchase. They can also advise you on any steps you should take to protect your interests.
Obtain Title Insurance: Title insurance can protect you against any losses that may arise from the lis pendens or other title defects. Be sure to review the policy carefully to understand what is covered and what is excluded.
Negotiate the Purchase Contract: If you decide to move forward with the purchase, you may be able to negotiate terms that protect you in the event that the legal dispute is not resolved in your favor. For example, you could include a contingency clause that allows you to back out of the purchase if the lis pendens is not resolved by a certain date.
It is important to approach a purchase involving a lis pendens with caution and to seek the advice of professionals who can help you navigate the potential risks.
If you have any questions about this article or would like to discuss a scenario of your own with our team, please feel free to contact Colin Dubel at email@example.com or 949-735-6415.