Can You Sell A Property With A Lis Pendens?
Can You Sell A Property With A Lis Pendens?
Yes, you can technically sell a property with a Lis Pendens, but it can be challenging and may have significant implications. A Lis Pendens is a public notice that a lawsuit involving a claim on a property has been filed. This means that any potential buyer must assume any litigation that exists pertaining to the property. If a new buyer purchases the property, they inherit the responsibility of the lawsuit; the sale of the property does not prevent the plaintiff from seeking redress via litigation.
When it comes to selling a property with a lis pendens, there are considerations and challenges that both sellers and buyers need to be aware of. A lis pendens is a legal document filed with the County Recorder following the initiation of a lawsuit that affects the title or possession of a specific property. This document serves as notice to interested parties about the ongoing litigation and can have significant implications for the sale of the property.
If you’re in the midst of a lis pendens situation, you might be wondering if it’s possible to sell the property. While it is technically possible to sell a property with a lis pendens, it’s important to understand that the new buyer or lender would be subject to and affected by the outcome of the lawsuit. This can complicate the sale process and potentially deter buyers who are concerned about the uncertainty surrounding the litigation.
It’s worth noting that a lis pendens is typically filed when there is a dispute over the validity of a purchase contract or when there is a disagreement between the seller and buyer regarding the cancellation of an escrow. The presence of a lis pendens can have a chilling effect on the resale or refinancing of a property until the underlying litigation is resolved.
Key Takeaways:
- 1. A lis pendens is a legal document filed during a lawsuit that affects the title or possession of a specific property.
- 2. Selling a property with a lis pendens is possible, but it comes with challenges and uncertainties.
- 3. Buyers may be hesitant to pursue a property with a lis pendens due to potential risks.
- 4. Working with experienced real estate professionals and attorneys is crucial when dealing with a lis pendens situation.
- 5. Removing a lis pendens can be done through legal processes, such as a motion to expunge or reaching a resolution in the lawsuit.
Understanding Lis Pendens: What It Means for Selling a Property
A lis pendens, translated from Latin as “suit pending,” is a notice that there is a pending legal action involving real estate. When a lis pendens is filed, it creates a cloud on the title of the property and can affect future transfers or sales. If a property has a lis pendens, it can still be sold, but the lien must be satisfied before the title can be transferred free and clear to the buyer. This means that the claimant who filed the lis pendens must be paid or settled before the sale can proceed.
Buyers may be hesitant to pursue a property with a lis pendens as they run the risk of losing the property or their interest in it if the claimant prevails in the lawsuit. However, some buyers or investors may see a lis pendens as an opportunity to purchase a property at a potentially discounted price. It is important for sellers and buyers to work with experienced real estate professionals and attorneys to navigate the complexities of selling or purchasing a property with a lis pendens.
“A lis pendens can create challenges for selling a property as the new buyer or lender would be subject to and affected by the outcome of the lawsuit.”
Impact of Lis Pendens on Property Sales
Having a lis pendens on a property can significantly impact the sales process. It can discourage potential buyers, delay the closing, and complicate negotiations. Prospective buyers may be wary of purchasing a property with a lis pendens, as they may not want to assume the risk associated with the pending lawsuit.
Furthermore, lenders may be reluctant to provide financing for properties with a lis pendens, as they may be concerned about the potential for the claimant to place a lien on the property and disrupt the mortgage agreement. This can limit the pool of potential buyers and result in a longer time on the market.
| Impact of Lis Pendens on Property Sales | Advantages | Disadvantages |
|---|---|---|
| Discourages potential buyers | Opportunity to purchase property at a potentially discounted price | Buyer assumes the risk of the pending lawsuit |
| Delays the closing process | – | Limited pool of potential buyers |
| Complicates negotiations | – | Lender may be reluctant to provide financing |
Despite these challenges, it is possible to sell a property with a lis pendens. Sellers should be prepared to disclose the lis pendens to potential buyers and work closely with their attorney to navigate the legal process. By addressing the lis pendens proactively and seeking resolution, sellers can increase the likelihood of a successful sale.
How to Deal with Lis Pendens and Sell Your Property
If you find yourself in the situation of having a lis pendens on your property and you want to sell it, it’s important to seek guidance from a specialized real estate attorney like myself. Dealing with a lis pendens can be complex, but with the right legal expertise, you can navigate the process successfully.
One option to remove a lis pendens is by filing a motion to expunge, which requires a court order from a circuit judge. This motion aims to demonstrate that the claimant does not possess a valid claim in the lawsuit. With the help of your attorney, you can present the evidence and arguments necessary to support your case and have the lis pendens removed.
Another approach is to work towards a resolution or settlement of the underlying litigation. By reaching an agreement with the claimant, the lis pendens can be removed from your property, easing the way for a potential sale. Your attorney will guide you through the negotiation process and ensure that your rights and interests are protected.
Throughout the entire process, it’s crucial to serve all interested parties with the lis pendens and adhere to the proper filing procedures with the county recorder and circuit court. Any mistakes in filing can have serious consequences, such as the potential dismissal of the lawsuit or even financial liabilities. Trusting an experienced real estate attorney will help you navigate these complexities and sell your property in a timely manner.
FAQ
Can you sell a property with a lis pendens?
Yes, a property with a lis pendens can still be sold, but the lien must be satisfied before the title can be transferred to the buyer.
What does lis pendens mean for selling a property?
Lis pendens creates a cloud on the title of the property and can affect future transfers or sales. The claimant must be paid or settled before the sale can proceed.
Are buyers hesitant to purchase a property with a lis pendens?
Some buyers may be hesitant as they run the risk of losing the property or their interest in it if the claimant prevails in the lawsuit. However, others may see it as an opportunity to purchase at a potentially discounted price.
How can I remove a lis pendens on my property?
Consult with an attorney who specializes in real estate law. They can guide you through the process of removing the lis pendens through a motion to expunge or reaching a resolution or settlement of the pending lawsuit.
What are the consequences of misfiling a lis pendens?
Misfiling a lis pendens can have serious consequences, including potential dismissal of the lawsuit and financial liabilities. It is important to follow the proper filing procedures with the county recorder and circuit court.
How can I navigate the process of dealing with a lis pendens and sell my property?
By working with an experienced real estate attorney, sellers can navigate the process of dealing with a lis pendens and sell their property in a timely manner.