In the event that a Seller of Buyer breaches a Real Estate Purchase or Sales Contract, it may become necessary to file a lawsuit to ensure that the Property will not be sold or encumbered during the course of litigation to resolve the underlying dispute. While it is not the actual lawsuit that barrs the property from being sold or encumbered, an ancillary document typically accompanies the lawsuit and is filed in the county records where the property is located. That document is called a Lis Pendens and provides notice to all parties that the Title or claim to the property is being disputed.

What is a Lis Pendens

A Lis Pendens is a formal document drafted to ensure that the property you may be entitled to remains untouched until the judgment of the underlying proceeding says otherwise.

Because the Lis Pendens acts to provide notice of the underlying litigation, the record owner of the property may still be able to sell it, although the purchaser will be buying it subject to the outcome of the lawsuit. It is also unlikely that any Title Company would provide insurance on the Property while it has a Lis Pendens on it.

As Provided in part of the Texas Property Code Sec. 12.007. “LIS PENDENS.

(a) After the plaintiff’s statement in an eminent domain proceeding is filed or during the pendency of an action involving title to real property, the establishment of an interest in real property, or the enforcement of an encumbrance against real property, a party to the action who is seeking affirmative relief may file for record with the county clerk of each county where a part of the property is located a notice that the action is pending.

(b) The party filing a lis pendens or the party’s agent or attorney shall sign the lis pendens, which must state:

  1. the style and number, if any, of the proceeding;
  2. the court in which the proceeding is pending;
  3. the names of the parties;
  4. the kind of proceeding; and
  5. a description of the property affected.

Effect of a Lis Pendens

The Lis Pendens is merely an affidavit but has the effect of a Lien since it provides public notice to all potential parties of a lawsuit. As such, the Lis Pendens does not stand on its own, and can only be filed as an accompaniment to an actual lawsuit. The claim to the property must be the primary justification of the underlying lawsuit for a Lis Pendens to be used in a proper fashion.

As an interested party to Real Estate Sales Contract, it is imperative that the Lis Pendens document gets filed in a proper and timely fashion. If there is any mistake during the filing or drafting of the Notice of Lis Pendens, it may be ineffective or at worse, fail to put all parties on notice and allow the Real Estate to be conveyed.

Bonafide Purchasers of Real Estate as They Related to a Lawsuit

A Bona Fide Purchaser (BFP) is someone who innocently purchases a property without knowing that it is subject to another pending claim. In most cases, BFPs are not found “innocent” as long as the Lis Pendens is filed and drafted properly. When closing with a Title Company or seeking a General Warranty Deed, it is very difficult for a buyer to make any allegations as a “BFP” assuming the Lis Pendens was filed and recorded before closing.

Enforceability of a Notice of Lis Pendens

If the court feels that the Lis Pendens is unenforceable, they do have the right to invalidate the entire document by granting a Motion to Expunge or Cancel the document which may have the effect of removing the Lis Pendens from the county records.

The Texas Statute regarding Expungement of a Lis Pendens is found in Sec. 12.0071, which states in part
“MOTION TO EXPUNGE LIS PENDENS.

A party to an action in connection with which a notice of lis pendens has been
filed may:

  1. apply to the court to expunge the notice; and
  2. file evidence, including declarations, with the motion to expunge the
    notice.

(b) The court may:

  1. permit evidence on the motion to be received in the form of oral
    testimony; and
  2. make any orders the court considers just to provide for discovery by a
    party affected by the motion.
    The court shall order the notice of lis pendens expunged if the court determines
    that:
    the pleading on which the notice is based does not contain a real property
    claim;
    the claimant fails to establish by a preponderance of the evidence the
    probable validity of the real property claim; or
  3. the person who filed the notice for record did not serve a copy of the notice on each party entitled to a copy under Section 12.007(d).”

Get our Experience on Your Side

Drafting a Lis Pendens should be done by an experienced real estate attorney and needs to be performed as soon as possible with the actual lawsuit. In order to ensure that your rights are protected and you claim to real estate is unaffected, make sure that the attorney drafting your legal notices is proficient in Real Estate Law and Lis Pendens drafting. Contact the Attorneys at the Farah Law Firm, P.C. for all of your property litigation needs.