If you have ever purchased a piece of real estate or been involved a mortgage foreclosure or short sale, you may have run across the term “lis pendens.” This phrase, which is Latin for “lawsuit pending” is often found on a document that is part of the initial paperwork in a foreclosure lawsuit. You may also run across it during a search of property records. In short, a lis pendens is a legal document that is filed against real estate and is meant to inform the public that the property they are attempting to buy, sell, transfer, or trade is the subject of a lawsuit.
A lis pendens basically serves as a notice to both the public and the property owner. The public is put on notice that the ownership of the property is in dispute, and gives the property owner notice that another person or entity is challenging his or her ownership of the property.
For example, people who are facing foreclosure will almost always receive a notice of lis pendens as part of the initial mortgage foreclosure lawsuit documents. Included with the complaint, summons, and exhibits is usually a 1-2 page lis pendens notice.
An existing lis pendens should come up in a thorough title search. If a lis pendens is attached to the property, it must be cleared or dissolved before the owner can transfer the property legally under Florida law (in most cases).
As a result, a lis pendens is a powerful tool for collecting a debt. For most people, their home is their most valuable asset. After years or decades of paying down a mortgage, homeowners look forward to turning a profit on their property when they sell their home. When a lis pendens is attached to the property, the homeowner will be forced to clear the lien before receiving any of the proceeds of the sale.
In order to dissolve a lis pendens, the dispute must be resolved—usually by paying the person who is owed money. This could mean contacting the lienholder and offering to pay off the debt, or it may require a court order once a foreclosure case or property dispute is finished.
In Florida, state law provides homeowners with strong protections against debt collectors. Unlike other states, Florida’s homestead law prohibits debt collectors from attaching lis pendens to a person’s primary residence unless a debt is related to the property itself.
Practically, this means that most lis pendens are filed by mortgage lenders. Since the mortgage lender provided the money to purchase the property, the law gives the mortgage lender the right to file a lis pendens against the property if the loan goes into default. Additionally, cities, counties and municipalities may file a lis pendens in order to collect unpaid property taxes. Because these costs and expenses are integral to maintaining a home, the entities that are owed money can attach notices of their debts directly to the property itself.
In addition to mortgage lenders, only people or entities who are owed money in relation to the home are allowed to file a lis pendens. These lis pendens, also known as service liens, make sure that contractors and others who perform services on a property have a means of getting paid for their work. For instance, if a homeowner purchases a new roof or adds an addition onto the home, that contractor or construction company will be able to file a lis pendens against the property if the bill is not paid.
In contrast, most commercial debt collectors cannot file a lis pendens against a person’s primary residence. Florida law states that credit card debts, medical debts, student loans, and other types of consumer debts cannot be the basis of a lis pendens. The state’s homestead law ensures that people will not lose their home simply because they cannot pay a credit card bill.
If you have received a notice of lis pendens, it is important to take action immediately. By contacting an attorney, you can begin the process of resolving the debt and clearing the lis pendens.At Loan Lawyers, our attorneys will help you defend your home from creditors. To schedule a free consultation and learn more about how we can help you, contact our office today by calling (888) FIGHT-13 (344-4813).