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Lis pendens is a Latin term that literally means that a suit is pending. While a lis pendens can technically refer to any pending lawsuit, in legal parlance it is most often used to refer to claims concerning real estate. A lis pendens can have a significant impact on the attractiveness of a property, to the point that it could lead to a dramatic decline in that property’s value. As a result, anybody who is considering buying or selling a home should be well aware of what a lis pendens is and how it could affect his or her real estate transaction.

 

Why a lis pendens matters

A lis pendens is a public notice that is recorded in county real estate records. This notice is recorded to notify the public, including potential buyers and sellers of the property in question, that a lawsuit involving that property is pending. A lis pendens matters because if a buyer purchases real estate with a lis pendens against it, that buyer will still have to abide by the final result of the lawsuit. In the case of a house being foreclosed, for example, a lender would file a lis pendens against the foreclosed home. Lis pendens, however, are not related exclusively to foreclosures, as the following example shows.

 An example

 Say person A intends to sell his property to person B. The two sign a contract for the transfer of the property, but person A decides that person B has breached the contract. As a result, person A refuses to sell the property to person B, but person B sues person A for refusing to sell the property. As a result, a lis pendens is filed against the property. While the lawsuit is still pending, person A then sells the property to person C, but afterwards a court rules in person B’s favor, thus giving the title of the property to person B. As a result, person C loses his title to the property and his only recourse for recovering the money he paid for the property is to get it back from person A, the original homeowner.

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