A lis pendens is an official notice to the public that a lawsuit involving a claim on a property has been filed. It ties into the understanding that a property buyer must accept any ongoing litigation related to the property they purchase.
If a financial institution sues the owner of a plot and a new buyer acquires it, the new owner assumes the lawsuit’s responsibilities. The property’s sale does not impede the plaintiff from pursuing their case in court. This can represent a contingent liability.
Key Insights
- A lis pendens is a public, official notice that a pending lawsuit or claim is associated with a property.
- Lis pendens can only be filed if the claim is directly related to the property; laws often require the property owner to handle any litigious matters tied to it.
- Lis pendens are typical in divorce cases dividing assets, or when a property faces foreclosure after a mortgage default.
How Lis Pendens Operate
Lis pendens, directly translated from Latin as
Related Terms: lis pend, real estate litigation, pending lawsuit notification, contingency liability
References
Get ready to put your knowledge to the test with this intriguing quiz!
---
primaryColor: 'rgb(121, 82, 179)'
secondaryColor: '#DDDDDD'
textColor: black
shuffle_questions: true
---
## What is "Lis Pendens"?
- [ ] A final court judgment
- [ ] A lease termination notice
- [x] A notice of a pending lawsuit involving title to a property
- [ ] A property appraisal report
## What is the primary purpose of a Lis Pendens?
- [ ] To estimate property value
- [x] To inform potential buyers or lenders that there is a legal claim against the property
- [ ] To remove a tenant
- [ ] To approve mortgage applications
## When a Lis Pendens is filed, how does it affect the property?
- [ ] It frees the property from legal encumbrances
- [ ] It increases the property's market value
- [ ] It has no effect on the property's transactions
- [x] It creates a public record indicating potential legal action involving the property
## Which party generally files a Lis Pendens?
- [x] The plaintiff in a lawsuit
- [ ] The property owner
- [ ] The mortgage lender
- [ ] The tenant
## Can a Lis Pendens be used for non-real estate litigation?
- [x] No, it is specifically for lawsuits involving real estate
- [ ] Yes, for all types of civil litigation
- [ ] Yes, but only by government entities
- [ ] No, it is only for criminal cases against a property owner
## After a Lis Pendens is recorded, what must the property owner do before selling the property?
- [x] Resolve the lawsuit or legal action
- [ ] Reduce the asking price
- [ ] Remodel the property
- [ ] Obtain a new appraisal
## What happens to a property's marketability once a Lis Pendens is recorded?
- [ ] It becomes more attractive to buyers
- [x] It becomes less attractive due to the pending lawsuit
- [ ] It experiences no change
- [ ] It gains historical property status
## How can a Lis Pendens be removed from a property's record?
- [ ] Time-expired automatically after one year
- [ ] By the property owner filing a removal request
- [x] When the lawsuit is resolved or dismissed
- [ ] When the subsequent property owner submits a clearing document
## What should buyers or lenders do when they find a Lis Pendens on a property?
- [ ] Ignore it, as it has no significant effect
- [ ] Purchase or lend as usual without concern
- [x] Investigate the legal action and assess the risks involved
- [ ] Proceed with the transaction but at a reduced price
## What does "Lis Pendens" literally translate to from Latin?
- [x] Litigation pending
- [ ] Property lost
- [ ] Legal judgment
- [ ] Land purchased
