Attorney Brendan A. Sweeney Of Sweeney Law, P.A. Featured In The September/October 2024 Edition Of The Broward County Bar Barrister – Lis Pendens Basics in Florida

President Franklin D. Roosevelt pointedly stated: “[r]eal estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” While this still may be true today, any purchaser or seller of real property in Florida needs to be cognizant of the impact a recorded lis pendens can have upon real property.

The latin term “lis pendens” translates to “pending lawsuit,” but is defined by Florida courts as “the jurisdiction, power, or control which courts acquire over property involved in a pending suit.” Med. Facilities Dev., Inc. v. Little Arch Creep Props., Inc., 675 So. 2d 915, 917 (Fla. 1996). The imposition of a lis pendens functions as a harsh and oppressive remedy that clouds title and prevents an owner from selling or dealing with the property. Avalon Associates of Delaware Ltd. V. Avalon Park Associates, Inc., 760 So. 2d 1132, 1134 (Fla. 5th DCA 2000). A lis pendens is a notice of commencement of an action involving or affecting real or personal property involved therein or to be affected thereby. Owners of real property that have a lis pendens recorded against it will most likely be prevented from selling, refinancing, and/or obtaining title insurance for the subject property.

Section 48.23(c)1, Fla. Stat., provides in pertinent part, that a notice of lis pendens must contain the following: 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; and a statement of the relief sought as to the property. Fla. Stat. § 48.23(c)1.

Often times a lis pendens is founded upon a duly recorded instrument, such as a duly recorded mortgage or a construction lien pursuant to Chapter 713, Fla. Stat. The Fifth District Court of Appeals established a simple test to determine whether an action is based on a duly recorded instrument. If the lis pendens places a cloud on title that did not previously exist, then the action is not based on a duly recorded instrument. Mohican Valley v. MacDonald, 443 So. 2d 479, 481 (Fla. 5th DCA 1984) (concluding a lawsuit to cancel a fraudulently transferred deed is not an action founded upon a duly recorded instrument and ordering that the lis pendens be stricken from the record until a bond has been posted.)

When a lis pendens is founded upon a duly recorded instrument the party recording the lis pendens can maintain the lis pendens as a matter of right pursuant to Florida law. When a lis pendens is not founded upon a duly recorded instrument, such as in an action for specific performance of a purchase and sale of real property, then the court controls and discharges the lis pendens as the court would grant and dissolve injunctions. Section 48.23(3), Florida Statutes, provides in pertinent part: When the pending pleading does not show that the action is founded on a duly recorded instrument … the court shall control and discharge the recorded notice of lis pendens as the court would grant and dissolve injunctions. Fla. Stat. § 48.23(3).

When a lis pendens is not founded on a duly recorded instrument, the safeguards that apply to an injunction are implicated. The elements of an injunction are (i) a substantial likelihood of success on the merits; (ii) lack of an adequate remedy at law; (iii) irreparable harm absent the entry of an injunction; (iv) and that injunctive relief will serve the public interest. See, e.g., Liberty Counsel v. Florida Bar Bd. of Governors, 12 So. 3d 183, 186 (Fla. 2009). The statutory reference to injunctions in Section 48.23(3), Fla. Stat., exists primarily to permit a property holder to request that the lis pendens be discharged or that plaintiff post a bond to protect the property holder from irreparable harm. See Chiusolo v. Kennedy, 614 So. 2d 491, 492 (Fla. 1993). Although the trial judge has broad discretion to require the proponent of a lis pendens to post a bond, it is an abuse of discretion to not require a lis pendens bond where the defendant will likely suffer damages. Empire Ocean Residence Realty, LLC v. CDR Creances, S.A.S., 44 So. 3d 179, 180 (Fla. 3d DCA 2010) review denied, 54 So. 3d 973 (Fla. 2011).

It must be noted, the trial court’s discretion to require a bond is not limited only to cases in which the property holder defendant can show irreparable harm. Med. Facilities Dev., Inc. v. Little Arch Creek Properties, Inc., 675 So. 2d 915, 917 (Fla. 1996). Rather, the trial court may also consider the likelihood of other damages that do not meet the standard of irreparable harm, such as the potential loss or damage the defendant will likely incur if the notice of lis pendens is unjustified. Id.; see also Med. Facilities Dev., Inc. v. Little Arch Creek Prop., Inc., 656 So. 2d 1300 (Fla. 3d DCA 1995) (reasoning that there are two main reasons why a bond should be required where the underlying lawsuit is not founded upon a duly recorded instrument; one is based upon Florida Statutes section 48.23(3), and the other upon simple fairness.)

In cases where a lis pendens bond is required, the amount of the bond should bear a reasonable relationship to the amount of damages that will likely result if it is later determined that the notice of lis pendens was unjustified. Real Inv., LLC v. Oaks Group, Inc., 973 So. 2d 643, 644 (Fla. 4th DCA 2008). The proper method of measuring damages for wrongful filing of lis pendens is the diminution in value to the subject property, plus consequential damages, plus attorney’s fees. S & T Builders v. Globe Prop., Inc., 909 So.2d 375, 376 (Fla. 4th DCA 2005).

When a lis pendens is not founded upon a duly recorded instrument, the plaintiff bears the burden to establish a showing of good faith and fair nexus between the apparent legal or equitable ownership of the property and the dispute embodied in the lawsuit. Nu-Vision, LLC v. Corporate Convenience, Inc., 965 So. 2d 232, 234 (Fla. 5th DCA 2007) citing Chiusolo v. Kennedy, 614 So. 2d 491, 492 (Fla. 1993). In Nu-Vision a property owner sought to dissolve a lis pendens in which the underlying claim was an action in equity seeking specific performance. Id. at 233–34. The court recognized the sufficiency of a complaint in a civil action is a question of law, to be determined from “the four corners of the complaint and the attachments incorporated into the complaint.” Id. at 234. The Court concluded that, as a matter of law, plaintiff could not establish all elements of the underlying claims, and upheld the trial court’s ruling discharging the lis pendens. Id. at 236.

The case law concerning lis pendens in Florida is exhaustive and factually intensive. This article is by no means meant to be a thorough analysis, but instead, a brief overview and introduction to the basics and implication of having a lis pendens recorded in Florida.

See original article here – Pages 20-21