Get That Lis Pendens Off My Property
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The lis pendens is a tool often used by probate attorneys to secure their client’s potential interest in an opposing party’s real property by making it difficult for the opposing party to sell the property or obtain a loan against it. While placing a cloud against a real property is easy, removing it can be difficult.
Despite the utility of a lis pendens, it is not invincible, as removing a lis pendens is a process, even if it was recorded properly. While it is not technically necessary to remove a lis pendens on real estate in order to sell the property or take a loan out against it, buyers or lenders are unlikely to involve themselves with the property if it is the subject of a lawsuit, so a property subject to a lis pendens may be difficult if not impossible to sell on the open market.
In this video, Keystone Law Group Partner Joshua Taylor discusses the lis pendens (now called a Notice of Pendency of Action) and how to remove it.
What is a lis pendens?
The aim of a lis pendens is to notify any persons who may subsequently acquire an interest in real estate (e.g., buyers or lenders on the property) that there is a pending claim affecting the property.
A recorded lis pendens does not necessarily stop the sale of real property; rather, it creates a cloud on title, making it unlikely that the property will be sold or encumbered with debt for the remainder of the underlying action since whoever acquires an interest in the property will be bound to the subsequent judgment.
Is it necessary to show a “real property claim” to file and record a lis pendens?
Only parties who have brought a “real property claim” in the underlying action are permitted to file and record a lis pendens against a real property. Notice of a lis pendens must be given once it is recorded.
According to the California Code of Civil Procedure § 405.2, to be considered a “real property claim,” the cause of action in a pleading, if meritorious, must affect either a) the title to, or the right to possession of, specific real property, or b) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.
Conversely, if the claimant is merely attempting to secure the monetary value of the property as possible payment for a future judgment, the lis pendens will likely be expunged for being improper.
Despite having been properly recorded, a lis pendens can be removed, foreclosed or “expunged.”
California law allows a lis pendens to be expunged if the claimant can show:
The claim in the underlying lawsuit was not a real property claim; or The court rules that the claimant’s interest in the subject real estate may be sufficiently protected by the posting of a bond or undertaking.
How is the amount of the undertaking determined?
According to the former CCP section 409.2, if an undertaking is to be used in place of a lis pendens, the amount of such an undertaking shall “be to the effect that such prevailing party will indemnify the other party for all damages which he may incur if he ultimately prevails in the action.” The language of this law has since been amended to say that the amount of the undertaking can be applied only to claims for damages resulting from the expungement, which are concerned with the real property claim and not the unrelated claims for money damages.
Can I recover my attorney’s fees?
Attorney fees are often recoverable on a motion to expunge. CCP section 405.38 provides that the court shall award to any prevailing party their reasonable attorney fees and costs of making or opposing the motion, “unless the court finds that the other party acted with substantial justification or that other circumstances make the imposition of attorney fees and costs unjust.”
Identifying the prevailing party for the purpose of awarding attorney fees related to the expungement of a lis pendens is not just a matter of identifying whether the lis pendens was withdrawn or expunged. For example, the court has the discretion to award attorney fees based on a determination of which party would have prevailed, whether the lis pendens claimant acted with sufficient justification in their withdrawal of the lis pendens, and whether the imposition of fees would be otherwise unjust.
How should I decide whether to file a claim for a lis pendens?
A lis pendens is not always the appropriate choice, and making the wrong choice or misusing a lis pendens does come with risks, including potentially having to pay the opposing party’s attorney’s fees and costs.
Because of these risks and for the purpose of recovering attorney fees, those moving to expunge a lis pendens should propose posting an undertaking that would be sufficient in protecting the interests of the recording party should their lis pendens be expunged.
Schedule a free consultation: www.keystone-law.com/contact-us
The lis pendens is a tool often used by probate attorneys to secure their client’s potential interest in an opposing party’s real property by making it difficult for the opposing party to sell the property or obtain a loan against it. While placing a cloud against a real property is easy, removing it can be difficult.
Despite the utility of a lis pendens, it is not invincible, as removing a lis pendens is a process, even if it was recorded properly. While it is not technically necessary to remove a lis pendens on real estate in order to sell the property or take a loan out against it, buyers or lenders are unlikely to involve themselves with the property if it is the subject of a lawsuit, so a property subject to a lis pendens may be difficult if not impossible to sell on the open market.
In this video, Keystone Law Group Partner Joshua Taylor discusses the lis pendens (now called a Notice of Pendency of Action) and how to remove it.
What is a lis pendens?
The aim of a lis pendens is to notify any persons who may subsequently acquire an interest in real estate (e.g., buyers or lenders on the property) that there is a pending claim affecting the property.
A recorded lis pendens does not necessarily stop the sale of real property; rather, it creates a cloud on title, making it unlikely that the property will be sold or encumbered with debt for the remainder of the underlying action since whoever acquires an interest in the property will be bound to the subsequent judgment.
Is it necessary to show a “real property claim” to file and record a lis pendens?
Only parties who have brought a “real property claim” in the underlying action are permitted to file and record a lis pendens against a real property. Notice of a lis pendens must be given once it is recorded.
According to the California Code of Civil Procedure § 405.2, to be considered a “real property claim,” the cause of action in a pleading, if meritorious, must affect either a) the title to, or the right to possession of, specific real property, or b) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.
Conversely, if the claimant is merely attempting to secure the monetary value of the property as possible payment for a future judgment, the lis pendens will likely be expunged for being improper.
Despite having been properly recorded, a lis pendens can be removed, foreclosed or “expunged.”
California law allows a lis pendens to be expunged if the claimant can show:
The claim in the underlying lawsuit was not a real property claim; or The court rules that the claimant’s interest in the subject real estate may be sufficiently protected by the posting of a bond or undertaking.
How is the amount of the undertaking determined?
According to the former CCP section 409.2, if an undertaking is to be used in place of a lis pendens, the amount of such an undertaking shall “be to the effect that such prevailing party will indemnify the other party for all damages which he may incur if he ultimately prevails in the action.” The language of this law has since been amended to say that the amount of the undertaking can be applied only to claims for damages resulting from the expungement, which are concerned with the real property claim and not the unrelated claims for money damages.
Can I recover my attorney’s fees?
Attorney fees are often recoverable on a motion to expunge. CCP section 405.38 provides that the court shall award to any prevailing party their reasonable attorney fees and costs of making or opposing the motion, “unless the court finds that the other party acted with substantial justification or that other circumstances make the imposition of attorney fees and costs unjust.”
Identifying the prevailing party for the purpose of awarding attorney fees related to the expungement of a lis pendens is not just a matter of identifying whether the lis pendens was withdrawn or expunged. For example, the court has the discretion to award attorney fees based on a determination of which party would have prevailed, whether the lis pendens claimant acted with sufficient justification in their withdrawal of the lis pendens, and whether the imposition of fees would be otherwise unjust.
How should I decide whether to file a claim for a lis pendens?
A lis pendens is not always the appropriate choice, and making the wrong choice or misusing a lis pendens does come with risks, including potentially having to pay the opposing party’s attorney’s fees and costs.
Because of these risks and for the purpose of recovering attorney fees, those moving to expunge a lis pendens should propose posting an undertaking that would be sufficient in protecting the interests of the recording party should their lis pendens be expunged.
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در تاریخ 1401/02/27 منتشر شده
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