Fisher Law Corporation’s Frequently Asked Questions

The following are select subjects which are representative of the type of law we practice. Peruse the articles: If you don't find a subject that interests you, call us or e-mail us with your request.

Notice: The information contained in these articles is designed to provide accurate information in regard to the subject matters covered and is made available with the understanding that the information provided does not constitute the rendering of legal or professional services. All information is of a general nature, is specific to California law only, and is not intended to to replace professional or legal advice. Each person’s situation is unique and the information contained herein cannot be applied to any individual’s situation. If legal advise is required, the services of a professional should be sought.


What is an all-inclusive deed of trust? »

What is CERCLA? »

How does a condominium differ from a house? »

What are Covenants that run with the land? »

What is a deed in lieu of foreclosure? »

What are easements? »

What are Encroachments? »

How does escrow work? »

What is fire and flood insurance? »

How do foreclosures work? »

What are the different forms of doing business? »

What do trade terms mean? »

What are liquidated damages in real property contracts? »

What is a Lis Pendens? »

How do loan modifications work? »

What is a Mechanic’s Lien? »

How does a Multiple Listing Service work? »

What is an off-shore trust? »

How do real property taxes work? »

What is Procuring Cause? »

What is a Quitclaim Deed? »

What is RESPA? »

Who bears the risk of loss during escrow? »

What are second deeds of trust? »

What is the Statute of Frauds? »

What is Statute of Limitations on Debts Secured By a Mortgage? »

Does a buyer’s broker have a duty to inspect? »

What is The Parol Evidence Rule? »

What is Adverse Possession? »

 


Q. What is a Lis Pendens?

A. A purchaser or encumbrancer who receives title to real property, or a lien on real property, without actual or constructive notice of pending litigation is not bound by any judgment received in the litigation after his title interest or lien is recorded. The judgment recovered in the pending litigation is subject to a prior recorded or unrecorded conveyance or lien acquired by a bona fide purchaser or encumbrancer after the action is filed, but prior to the judgment.

For example, a mechanic who brings an action to foreclose his mechanic’s lien on subdivided property must join as defendants every person who has purchased a lot before the mechanic recorded his claim of lien, and every person who has purchased a lot, or received a junior lien after the mechanic recorded his claim but before he filed his action. He is not required to join in the action persons who purchased lots or received their junior liens after he has filed his action to foreclose his lien. However, the lien expires if an action is not filed within the time required by statute. A bona fide purchaser or encumbrancer who acquires an interest after the action is filed, without actual notice of the pending litigation, is not on notice of the action merely because the complaint is filed and he can assume that the lien has expired. The interest acquired by the bona fide purchaser or encumbrancer before a lis pendens is recorded is not bound by the judgment, and a foreclosure sale pursuant to the judgment does not eliminate his interest.

On the other hand, a purchaser or encumbrancer who acquires his title or lien with notice or knowledge that there is pending litigation affecting the property is subject to any judgment that is recovered in the litigation even though his title interest or lien is recorded prior to the judgment.

For example, when a person receives a deed of trust knowing that an action has been commenced against the grantor to establish that the person bringing the action is the true owner of the property, the lien of the trust deed is subject to any judgment recovered. If a decree confirms that the party bringing the action is the true owner of the property, the beneficiary of the trust deed does not have a lien on the property.

The knowledge that renders the subsequent lien or interest inferior to pending litigation can be actual or constructive. The mere filing of the complaint with the county clerk does not impart constructive knowledge of the action to third persons even though the complaint is a public record. Constructive notice of a pending litigation can only be given by documents which are recorded with the county recorder.

A party who files an action which affects the title to or right of possession of real property can record with the county recorder a “lis pendens” (Notice Of Pending Action), which is a notice that the action is pending. The purpose of the lis pendens is to give constructive notice to potential purchasers and encumbrancers of the claims of the parties in the pending litigation.

While the recordation of the lis pendens is mandatory in some types of actions, in most cases it is not a jurisdictional requirement. The only effect of not recording the notice is to allow subsequent interests in the property acquired after the action is commenced to achieve priority over any judgment subsequently recorded in the action.

The effect of the recorded notice is to bind all persons who acquire an interest in the property after its recordation by any judgment thereafter rendered in the action. It effectively clouds the title to the property described in the notice and impedes or prevents a sale or encumbrance of the property until the litigation is resolved or the lis pendens is expunged. Accordingly, it is merely a provisional remedy which the courts should allow only on a restrictive basis within the legislative intent for its use.

While the lis pendens may affect the marketability of the property, it does not deprive the owner of the use and benefits of ownership. Therefore, it does not constitute a “taking” of the property, and the statute that provides for the recordation of the lis pendens is constitutional within the limitations of the due process clause. When the action is proper for the recordation of the notice, the party who alleges the appropriate cause of action has an absolute privilege to record the notice, and the mere recordation of the notice cannot be the basis for an action for slander of title. However, it is not privileged when the action does not seek relief which affects the title or possession of real property. When the pleadings do not contain the appropriate cause of action, the property owner can pursue an action for damages caused by the slander of the property’s title and for interference with prospective economic advantage.

The lis pendens only gives constructive notice when the underlying action is of the proper type in which a lis pendens is authorized. A lis pendens which is recorded in support of an action which does not affect the title or possession of real property does not give constructive notice of the pending litigation to subsequent third parties.

The recordation of a lis pendens in an action where it is not permitted by statute can be expunged from the public records by court order. Also, if a person records a lis pendens to enforce a claim that he knows is false, and the property owner then satisfies the claim in order to clear the title to his property, any amounts paid to the claimant can be recovered as a payment made under economic duress.

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“The administration of justice is the firmest pillar of government.”

—George Washington