Can You Sell a House With a Lis Pendens or Pending Lawsuit?
Can you sell a house with a lis pendens for a decent price — ideally before the bank forecloses or costly legal fees pile up?
You’d like to sell off a piece of real estate, but you’re severely behind on your mortgage payments, owe a bunch of property taxes to the county, or find yourself in the midst of a heated divorce. Any one of these situations could result in someone, such as the lender or your former spouse, suing you — in effect placing what’s known as a “lis pendens” on your home.
Desperate for a clean break from the situation, you’re wondering: can you sell a house with a lis pendens for a decent price — ideally before the bank forecloses or the expensive legal fees pile up?
We get that this is a stressful situation, so we put together this guide including:
- What is lis pendens?
- Who files lis pendens and what’s their motivation?
- How a lis pendens affects your ability to sell the house
- The risk buyers see in pursuing a house with a lis pendens
- The hidden opportunity in selling with a lis pendens
- Who can help you resolve the lis pendens
Step one: Talk to an expert!
Selling your house soon? Connect with a top agent near you to get an expert opinion on how much your house will sell for, what to fix before listing, and the latest local housing market trends.
The basics: What is lis pendens?
Translated from Latin, “lis pendens” means “a suit pending.” So if you’re selling a home with a lis pendens, you have a formal notice of a pending lawsuit on a property that could interfere with the sale.
“A lis pendens is a written notice that a legal action has been filed involving real estate,” says David Reischer, Esq., real estate attorney and CEO of LegalAdvice.com.
“Typically the claim involves either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county records office, so there is a record of the action alerting any potential buyers of the dispute.”
A lis pendens is recorded on the title of the home, just like any other lien or mortgage. To find out whether one has been filed on your property, you can do a free search at the county clerk or recorder’s office, either online or in-person. You’ll just need your house’s parcel number.
Another option is to contact a title company and request that they run a title search on the property, or ask your real estate agent for guidance.
In the event that you aren’t aware of the lis pendens when you go to sell your home, it will eventually come to light when the purchasing process begins, as either the buyer, the agent, or the lender will most likely obtain a title report that will note the existence of the pending lawsuit.
According to Jeffrey L. Nogee, partner at Tully Rinckey PLLC, a lis pendens is only valid where the underlying dispute involves the real property. Filing a lis pendens for a case that does not involve an ownership interest in the house is not permitted and carries strict penalties if misused.
