Source: Investopedia —
What Is a Lis Pendens?
A lis pendens is an official notice to the public that a lawsuit involving a claim on a property has been filed. Lis pendens is connected to the concept that a property buyer must assume any litigation that exists pertaining to the property.
If a bank is suing the owner of a lot and a new buyer purchases it, the new owner inherits the responsibility of the lawsuit; the sale of the property does not prevent the plaintiff from seeking redress via litigation. It can represent a contingent liability.
How Lis Pendens Work
Lis pendens is literally translated from Latin as “suit pending.” This condition can adversely affect the sale price or the possibility of a sale since any pending litigations are typically unfavorable for the owner. The term is commonly abbreviated “lis pend.”
Lis pendens provides constructive notice, or a warning, to prospective homebuyers that the ownership of a property is in dispute and litigation is pending. Lis pendens can only be filed if a claim is related specifically to the property. By filing a lis pendens, an individual or entity is protecting its claim to the title pending the lawsuit’s outcome.
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