What Happens After a Lis Pendens is Filed?
A lis pendens, Latin for "pending litigation," is a formal notice filed with the court and recorded with the relevant county recorder's office. This notice alerts potential buyers and lenders that a lawsuit affecting a specific property is underway. Filing a lis pendens can have significant consequences for the property owner and anyone considering a transaction involving that property. Let's explore what unfolds after a lis pendens is filed.
What is the immediate impact of a lis pendens?
Immediately following the filing, the lis pendens becomes a matter of public record. This means anyone searching the property records will see the notice, significantly impacting the property's marketability. Potential buyers are generally hesitant to proceed with a purchase while a lis pendens is in effect due to the uncertainty it creates regarding the property's ownership and potential encumbrances. Lenders are equally cautious, as the lawsuit could jeopardize their investment.
How does a lis pendens affect the property's sale?
The presence of a lis pendens makes it incredibly difficult, if not impossible, to sell the property. Most buyers will refuse to proceed until the lawsuit is resolved. Even if a buyer is found, the lis pendens acts as a cloud on title, potentially requiring complex legal maneuvers to clear it during the closing process. This often leads to protracted negotiations, delays, and a lower sale price than the property might otherwise command.
Can the property owner still use or sell the property?
While a lis pendens doesn't automatically prevent the owner from using or selling the property, the process becomes incredibly cumbersome. The owner's ability to sell is severely limited, and the potential buyer needs to be aware of the pending lawsuit and its potential implications. For example, the outcome of the lawsuit might transfer ownership to another party, or it might impose liens or encumbrances on the property, affecting the buyer's rights and interests.
What happens if the lawsuit is won or lost?
The outcome of the lawsuit directly determines the fate of the lis pendens. If the plaintiff (the party who filed the lis pendens) wins the case, the court's decision usually dictates the next steps regarding the property, which might include a sale, transfer of ownership, or imposition of liens. Conversely, if the defendant (the property owner) prevails, the lis pendens is typically released or expunged from the property records, clearing the way for a more straightforward sale or transaction.
How long does a lis pendens remain in effect?
The duration of a lis pendens varies depending on the jurisdiction and the nature of the lawsuit. It typically remains in effect until the lawsuit is concluded, which might take months or even years. In some cases, a court might order its removal if it deems the lis pendens inappropriate or frivolous.
Can a lis pendens be challenged or removed?
Yes, a lis pendens can be challenged if it's deemed improper, malicious, or without merit. The property owner can file a motion to have the lis pendens removed if they believe it's unwarranted or is causing undue hardship. The court will review the motion and determine whether the lis pendens should remain in effect. This process often involves legal arguments and evidence presented by both parties.
What are the potential legal remedies for a wrongful lis pendens?
Filing a wrongful lis pendens can lead to significant legal consequences for the party who filed it. The property owner may be entitled to damages, including compensation for any financial losses incurred as a result of the lis pendens, such as lost profits from a failed sale or increased borrowing costs. In some jurisdictions, punitive damages may also be awarded to punish the party for their malicious actions.
Navigating the complexities of a lis pendens requires legal expertise. This information is for general understanding only and does not constitute legal advice. Consulting with a real estate attorney is crucial for anyone involved in a transaction affected by a lis pendens.
