Closing on the perfect home or other property in a competitive market can feel like running a marathon. After finally getting to the offer and acceptance finish line, it can be devastating to learn that something is wrong. One issue that may interfere with a sale is finding a Lis Pendens notice in a property’s title history. If you discover this entry in a real estate record, you will need to find out: What is a Lis Pendens, and how can it affect my title?
What is a Lis Pendens?
A Lis Pendens is an official notice that there is a pending “action (lawsuit) affecting title to real property.” A Lis Pendens is recorded in the property’s title record to place potential buyers, lenders, and any other interested parties on notice that a property is subject to pending litigation. If a party were to purchase or invest in real estate with a Lis Pendens, they would do so knowing that the case outcome might later impact their rights.
How is a Lis Pendens Created?
Arizona Law provides that when a case affecting title to real property is filed or answered, the plaintiff and defendant may file a notice of the action or defense ” in the office of the recorder of the county in which the property is situated…” The Lis Pendens must include the names of the parties to the suit, identify the objective of the action or affirmative defenses, name the relief demanded, and describe the property impacted by the case.
When is a Lis Pendens Improper?
A Lis Pendens notice is improper when there is no pending lawsuit or if the case is not an “action affecting real property.” The definition of what constitutes an “action affecting real property” has been the subject of debate in Arizona courtrooms. However, in general, a lawsuit affects real property when it directly impacts ownership or title. For instance, a case involving a seller’s failure to disclose a known material fact, or one concerning a breach of a real estate purchase contract, would be considered actions that affect real property.
What Can You do to Remove a Lis Pendens?
In General, a Lis Pendens will remain on a title record until it is expunged or released. The court may have dismissed the lawsuit, but the Lis Pendens will still be on the record because the litigation parties failed to take steps to have the information removed. Likewise, an entry might be on a title record because of a clerical error. In those cases, the party seeking to clear the title should consult with a real estate attorney to remedy the mistake.
A Lis Pendens may also be improperly recorded on a title record by fraud or mistake. Arizona law provides that if the Lis Pendens was improperly recorded, and the filer knew that the “document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid,” that the injured party can bring suit to clear the cloud from the title and recover damages and attorney’s fees from the fraudulent party.
When there is a Lis Pendens on a real estate title record, it can be a strong deterrent to prospective buyers. These types of clouds can also interfere with an owner’s ability to possess a clear title to their property. If you have a property with a Lis Pendens recorded in the title record, you should consult with an experienced Arizona real estate attorney to discuss your issue and review your options.
When navigating through a real estate issue in Arizona, it’s critical that you have an experienced real estate attorney to protect your interests. Laura B. Bramnick is an experienced Arizona real estate attorney who can help you manage all aspects of your Arizona real estate matter. If you are seeking an exceptional, client-driven real estate lawyer in Phoenix and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.