Like many legal terms, “lis pendens” comes from Latin, and translates to “suit pending.” Understanding the purpose of filing a notice of lis pendens, and what an active lis pendens notice means, is crucial for anyone involved in a residential or commercial real estate transaction.
What is a Lis Pendens?
When a property is not subject to a duly recorded instrument, such as a construction lien, a notice of lis pendens serves as notice to the public that a specific property is subject to pending litigation involving a claim against the property. A notice of lis pendens is filed with the clerk in the county where the property is located and, according to Florida law, must include:
- The names of the parties.
- The date of the institution of the action, the date of the clerk’s electronic receipt, or the case number of the action.
- The name of the court in which it is pending.
- A description of the property involved or to be affected.
- A statement of the relief sought as to the property.
What Is the Purpose of Lis Pendens?
A lis pendens effectively acts as a warning to potential buyers of real property that ownership of that property is currently being litigated or that a claim has been made against the property. Filing a notice of lis pendens can protect those involved in a real estate transaction. With an active notice in place, it clouds the title to the property and should be revealed when a title search is conducted prior to closing. Either way, a seller should make sure that prospective buyer is aware of the pending litigation.
By way of illustration, imagine that Buyer A enters into a contract to purchase property from Seller B; however, Seller B attempts to back out of the sale. Buyer A files a lawsuit seeking specific performance as the remedy, meaning that if Buyer A is successful, Seller B will be forced to sell the property to Buyer A pursuant to the terms of the original contract. While that lawsuit is pending, Buyer C views the property and is interested in making an offer to purchase the property. Without an active notice of lis pendens, Buyer C would have no way of knowing that the property is currently the subject of litigation if Seller B fails to mention the lawsuit. A notice of lis pendens resolves that issue. If Buyer A wins the lawsuit, Seller B will be ordered by the court to sell the property to Buyer A, which could be a huge problem for Buyer C if they purchased the property from Seller B while the lawsuit was pending, especially if there was an active lis pendens.
It is important to note that a lis pendens does not legally prevent a seller from selling property; however, most title companies will not provide title insurance with an active lis pendens unless a bond is provided. If a buyer knowingly purchases property with an active lis pendens, the buyer effectively inherits the lawsuit.
When Does a Lis Pendens Notice Expire?
Under Florida law, a lis pendens that is unrelated to a lawsuit based on a duly recorded instrument such as a mortgage or a construction lien expires after one year unless it is extended by the court. If the underlying litigation has not yet been resolved, it is imperative that the party responsible for filing a lis pendens request an extension from the court prior to the expiration of the notice.
Consult the Real Estate Attorneys at Lieser Skaff
If you have questions or concerns about a lis pendens, consult with the experienced real estate attorneys of Lieser Skaff at 813-280-1256.