In a pending lawsuit where title or an ownership interest concerning real property is at issue, an interested party may file a lis pendens to notify the public that the real estate is subject to controversy. Lis Pendens is a Latin term that means “a pending lawsuit” and is defined as “a notice, recorded in the chain of title to real property required or permitted in some jurisdictions to warn all persons that certain property is the subject matter of litigation, and that any interest acquired during the pendency of the suit are subject to its outcome.” Lis Pendens, Black’s Law Dictionary (10th ed. 2014).
The requirements for filing a lis pendens are codified in the Texas Property Code. Only after a lawsuit has been filed, may a party to the action who is seeking affirmative relief file a lis pendens with the county clerk in the county where the property is located. Tex. Prop. Code § 12.007 (West 2017). Courts have established that the person filing the lis pendens must have a direct interest in the ownership of the real property and not simply a collateral interest to recover monetary damages. In re Collins, 172 S.W.3d 287, 293 (Tex. App.—Fort Worth 2005). As required by statute, a lis pendens must state “the style and number, if any, of the proceeding; the court in which the proceeding is pending; the names of the parties; the kind of proceeding; and a description of the property affected. Tex. Prop. Code § 12.007 (West 2017).
A lis pendens puts the public on notice that there is a pending lawsuit on certain real estate. More importantly, a lis pendens places a potential buyer or lender on notice that a person other than the title holder claims an interest in the property. Group Purchases, Inc. v. Lance Inv., Inc. 685 S.W.2d 729, 731 (Tex. App. —Dallas 1985, writ ref’d n.r.e.). Unlike liens or encumbrances that cloud title, a lis pendens is only a notice and does not prevent the sale of real property. It may however deter potential buyers or lenders from going through with a transaction that involves property under dispute. A lis pendens operates as a constructive notice to interested persons that are not parties to the lawsuit and allows courts to presume that all interested persons will exercise due diligence in searching the public records to verify the legal status of real property before finalizing transactions.
A lis pendens is effective from the time it is filed and dissolves when a judgment is issued. Tex. Prop. Code § 13.004 (West 2017). A court may also decide to expunge or cancel the lis pendens before litigation ends upon finding that the lis pendens was fraudulently filed. Tex. Prop. Code §§ 12.0071; 12.008 (West 2017). Furthermore, courts may cancel a lis pendens filed by persons seeking a collateral interest rather than a direct interest of the real property. In re Collins, 172 S.W.3d 287, 295 (Tex. App.—Fort Worth 2005).
A lis pendens is a tool for notifying the public, interested persons included, that certain real property is subject to the outcome of pending litigation. Practically, it will be extremely difficult for a seller to find a purchaser willing to acquire a property subject to a lis pendens. It is important to use a competent real estate lawyer when considering filing a lis pendens associated with a lawsuit or initiating proceedings to have a lis pendens removed.
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