Understanding Lis Pendens and Property Liens: What Property Buyers Need to Know

What Is a Lis Pendens and How Does It Affect Your Property Purchase?

A Lis Pendens, Latin for “litigation pending,” is a formal public notice that legal action involving real estate is in progress. When you’re considering purchasing a property and discover a Lis Pendens on the property title report, this serves as a crucial warning signal that requires immediate attention. Unlike standard liens that might be immediately visible on a title report, a Lis Pendens indicates ongoing litigation that could potentially result in future liens or encumbrances on the property.

According to the American Bar Association, a Lis Pendens is designed specifically to notify potential buyers and other interested parties that the property’s ownership or rights may be affected by pending litigation. This legal mechanism ensures that any party acquiring an interest in the property after the Lis Pendens filing takes that interest subject to the outcome of the litigation.

The Critical Difference Between Court Filings and County Recordings

One common misunderstanding among property investors, especially those new to real estate transactions, involves the distinction between court filings and county recordings. Documents filed with the court are not automatically recorded with the county recorder’s office. However, when a Lis Pendens is properly recorded with the county, it will appear on a comprehensive title report like those offered by US Title Records.

The National Association of Counties explains that county recorders maintain the official real property records that affect title to real estate within their jurisdiction. Court documents, while legally binding, must be separately recorded with the county to provide constructive notice to the public.

Understanding Property Title Reports and Their Limitations

Our Full Chain of Title Reports provide valuable preliminary information for property research but do not replace title insurance or legal advice. As noted by the American Land Title Association, preliminary title searches serve as a starting point for due diligence rather than a guarantee of clean title.

Many experienced real estate investors utilize our services for quick research purposes and to calculate investment risk. However, when issues such as a Lis Pendens are identified, further investigation is always warranted. Our reports include items specified in the service description, with additional document images available through our abstract feature or directly from official government sources.

The Importance of Legal Consultation for Property Auctions

When purchasing properties through auctions, especially those with title complications like a Lis Pendens, consulting with a qualified real estate attorney becomes essential. The National Association of Realtors recommends professional legal guidance when navigating complex property transactions.

Legal consultation can help answer critical questions about auction purchases affected by litigation:

• Were all legal documents properly served to all interested parties?
• Why weren’t certain lien amounts included in the auction price configuration?
• What are the state-specific laws regarding minimum bid requirements to cover existing liens?

Comprehensive Property Research Services for Investors

Most experienced investors utilize our Home Buyer’s Package or Full Property/Owner Lien Report for thorough due diligence. These comprehensive reports can be customized to include profile information on previous property owners, which helps identify potential judgments that should have been included in minimum auction bids.

The Urban Institute’s Housing Finance Policy Center emphasizes the importance of thorough title research in maintaining market efficiency and reducing investment risk.

Our Client Service Commitment

At US Title Records, we process all service orders immediately, with completion times typically ranging from 1-4 hours. Our client communication policy ensures that all written inquiries receive responses within 1-24 hours, depending on the research required.

While we cannot provide legal advice or title insurance, our flat-fee services include consultation on report findings. For specialized questions regarding legal implications of title issues, we can provide referrals to qualified attorneys in your area.

Consulting Services for Complex Title Issues

Our team is available every day of the year to answer questions about our reports and provide guidance on next steps when title complications arise. While we maintain a “no-frills” approach appreciated by professional investors, we’re equally committed to helping individual buyers understand the implications of their property title findings.

For more information about how Lis Pendens notices and other potential title issues might affect your property investment, visit our Frequently Asked Questions page or contact our Client Services team.

Disclaimer: The information provided here is for educational purposes only and does not constitute legal advice. Property buyers should consult with qualified legal professionals regarding specific title issues.