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What is a lis pendens and when is it used?

On Behalf of | Feb 14, 2023 | Real Estate Law

Thousands of real estate transactions occur in California each year, some simple and others extremely complicated. To protect yourself during the purchase or sale of a property, it’s essential to understand the law.

A lis pendens is an official notice informing the public that a claim on a piece of property has been filed. The concept of a lis pendens relates to several key concepts in real estate law and HOA disputes.

Why is a lis pendens necessary?

In real estate law, a buyer must be responsible for any lawsuits concerning the property they bought. This can have serious ramifications on the decision whether or not to buy a property or not. A lawsuit can cost significant money to defend, and an unfavorable judgment can have major financial consequences.

As such, a lis pendens is intended as a “buyer beware” notification. By publicly alerting any prospective buyers to the outstanding lawsuit, those buyers can make an intelligent decision as to whether to look elsewhere or not.

When are lis pendens notices commonly used?

One of the most frequent uses of a lis pendens is in foreclosures and mortgage defaults. When a property owner defaults, the lender (typically a bank) will file a lis pendens.

Another common situation where a lis pendens is used is during divorces. Often, a divorce will be in the process of resolution and decisions still must be made about how property will be split or allocated. The lis pendens prevents one couple from selling that property before the divorce is finalized.

A lis pendens can also be filed by a Homeowners Association for breaking HOA agreements or not paying required fees.

The lis pendens serves an important purpose in real estate transactions, informing any buyers of a property that they may be responsible for pending lawsuits connected with a property. Doing your due diligence, including looking into any lis pendens notices, is part of being a savvy real estate purchaser.