Understanding the Proper Use of a Lis Pendens
Let’s say that you are in a lawsuit, and something about that lawsuit involves a piece of property, whether it’s a residential or commercial property, or even land. The dispute isn’t exactly a lawsuit yet. But you want to make sure that the world knows that there is some potential legal action that could affect the ownership of this property, now or in the future.
The Lis Pendens
There is a way to do this, and it’s called the filing of a lis pendens. A lis pendens is a document that is filed in the public records that alerts the world that someone is asserting claim over the property.
A lis pendens is not, by itself, a legal bar to purchasing the property—someone can still legally close on property with a lis pendens filed on it.
But any prospective purchaser risks losing the property after closing, if the purchaser knew of the lis pendens, so the lis pendens effectively tells the world “stay away from this piece of property.” A lis pendens will also prevent the current owner from refinancing the property.
Because lis pendens are public records, the standard title searches that are done in property transactions, usually reveal their existence.
When Can They Be Filed?
Because a lis pendens serves as such a significant cloud on title, affecting the owners ability to transfer or sell the property, it cannot be used in just any situation.
To file a lis pendens, the party filing must have or show one of two things:
- That there is a recorded instrument, usually some mortgage or encumbrance, or perhaps something related to a construction mechanics lien—that potentially provides the filer the right to the property on or in the document.
- If this doesn’t exist, the person filing the lis pendens can show that there is a significant nexus between the property and the issues in the lawsuit, and that the outcome of the pending lawsuit, would alter, change or affect, ownership of the property. This is of course much less objective than having a document, and it will be up to a court to decide whether the lis pendens is valid or not.
Examples of when a lis pendens may be legally filed, include partnership disputes where the partnership owns property that is in dispute, or any business dispute (such as the breakup of any business) where owners or former owners have competing claims to the property.
Lis pendens are often filed in divorce action, where spouses have competing claims over the property.
Any loan or contract that relates to the property, would warrant the filing of a lis pendens.
Generally, any time the ownership of the property is the relief sought in the lawsuit or claim, a lis pendens can be filed. But just because the property is related to the lawsuit or claim, or a subject of the lawsuit isn’t enough—actual ownership of the property must be at issue or in dispute.
Don’t get in trouble. Make sure you’re filing documents that can legally be filed and used. Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954-440-3993 today.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0048/Sections/0048.23.html
letcf.com/what-is-a-lis-pendens-in-florida/
