The Lis Pendens: Form, Definition, and Effect:
By: Barry L. Miller, Esq. Offices Orlando.
Many real estate agents with clients going through the foreclosure process have come across a document known as a Lis Pendens. But what exactly is a lis pendens? What does it do? Does it adversely affect a pending transaction or sale?
In essence, a lis pendens translates to “pending litigation.” The lis pendens, when recorded in the public records where the property lies, serves as notice to the world at large that the particular property is facing legal action surrounding or otherwise encompassing the subject property. Typically, you will encounter a lis pendens in regards to foreclosure properties, properties engaged in partition or eminent domain proceedings, or in other actions which affect the title to a particular parcel.
The purpose of the lis pendens is to protect the interests of unidentified third-parties from being bound by an adverse judgment otherwise affecting the title to the property. For instance, suppose Owner A files suit against Owner B for partition (an action to force the sale or division of real estate) as a result of a dispute between Owners A and B. Owner B lists his 50% interest in the property for sale around this time. Potential Purchaser C will notice the lis pendens in a title search and thereby have actual notice that the property is subject to litigation. In the event Potential Purchaser C takes title to the property during the pendency of the Partition action, C’s interest will be taken subject to the judgment rendered in lawsuit. Which means, C could be forced to sell his newly acquired interest, or risk losing a portion of the property by division.
Therefore, under Florida Law, a party acquiring an interest in a property subject to a lis pendens takes that property subject to the interests of the party filing the lis pendens, as determined by court order in that particular lawsuit.
We recommend that a title search be performed prior to or immediately after entering into a contract for sale so that a buyer knows the “state’ of the property. Not only will the search reveal a lis pendens but also show other judgments, liens and encumbrances on the property.
Be cautious when proceeding to acquire an interest in a property subject to a pending court action. If you are interested in acquiring such a property, contact the Law Offices of Barry L. Miller for a free consultation at 407-423-1700 or via email at [email protected] so we may review the circumstances and legal repercussions of the purchase.