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Lis Penden defined

By Tony Hodge

Services for Real Estate Pros

June 04, 2007 03:30 PM

My next few posts will be entries to a glossary of useful real estate investor terms. Please feel free to add terms, comment on definitions, and/or give examples. As always I welcome constructive feedback.

Lis penden:

(1) Latin for "a suit pending." The term may refer to ANY pending lawsuit. (2) 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.

This is interesting because not all lis pendens are relevant to preforeclosure or notice of default however in many circles the terms are used synonymously. Essentially, a lis penden can be a mechanics lien or a lawsuit such as a mailman suing a homeowner over a dog bite.

Also, note that lis penden notices are “usually” filed in the county land records office. This does not mean that they are required by law to be filed there. It also implies that not all lis penden files will be found in the county courthouse. In fact, only lis pendens in which the court requests will be found at the courthouse. So what happens to the others? Your guess is as good as mine.

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Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Anthony,

It's been a while since I've experienced anything dealing with a lis-pendens. From past experience, buyers have also threatened a lis-pendens in contemplation ownership in a property. For example, if the seller tries to back out of a contract and sell the property to another. I also know this is not something to be used friviously, (although I'm not an attorney) I know there are consequences for filing a wrongful action.

I'd be interested to hear the experiences of others. Btw, I've also seen it spelled les-pendens and lis-pendens, both ways, and I'm not sure which is actually accurate.

Jun 04, 2007 04:40 PM

Tony Hodge

Piscataway, NJ

Lynda--thanks for your comment, I am from the East coast...I visited California once, boy do I miss Cali...I would love to have a second home there on day.

The point I was trying to make is that a common misconception in the minds of investors is that the term "Lis Penden" = preforeclosure or notice of default. This is entirely false. Here is some more commentary on lis pendens:

LIS PENDENS = NOTICE OF PENDING ACTION

The lis pendens procedure permits a party who institutes an action seeking to affect title to real property to provide constructive notice of the pendency of the action to potential bona fide purchasers, thus preserving the subject matter of the action until final judgment may be obtained.

The statutory lis pendens procedure derives from the common law doctrine that the mere filing of a lawsuit seeking to affect title to real property was constructive notice of the claim of the plaintiff in the lawsuit to the property. Statutory provisions enacted in New Jersey in the early nineteenth century regularized the common law lis pendens procedure, requiring the filing of a separate notice in the land records. In the 1970's, the evolution of constitutional doctrines limiting the availability of pre-judgment remedies called the constitutionality of New Jersey's lis pendens statute into question; it was recognized that the mere filing of a notice of lis pendens significantly impaired the ability of a property owner to convey marketable title. In 1981, the United States District Court for the District of New Jersey declared the statute constitutionally defective because it did not provide for a prompt hearing upon the filing of a notice of lis pendens.

Today in NJ many investors looking for preforeclosure deals will market to all homeowners receiving a lis pendens. The problem with this is that not all lis pendens are related to preforeclosure or notice of default.

Anthony

Jun 15, 2007 10:38 AM

David Saks

Memphis, TN

Broker / Industry Analyst

The key is that Lis Pendens is not in itself a lien, but only a notice of a possible future lien. Importantly, Lis Pendens establishes a priority for or against any later lien, also. The lien would be backdated to the date of the recording of the lis pendens. There is usually a pretty big gap between the time that a lawsuit is filed and the time that the court makes a final ruling or judgement in the case.

Mar 22, 2008 12:34 PM

Gita Bantwal

RE/MAX Centre Realtors - Warwick, PA

REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thanks for the post. I like to read about legal issues for info only.I always suggest they call an attorney.

Oct 07, 2008 12:56 AM

Tamara Schuster

Naperville Glen Ellyn Lisle Plainfield Wheaton Illinois - Naperville, IL

Realtor Broker - Naperville

There is a lot of confusion here. It is referred to often as foreclosure process has started.

Dec 22, 2011 04:28 PM

Lis Penden defined

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