How many times has your title company communicated there is a lis pendens on your title that needs to be removed before closing?
Let’s hope it isn’t very often, particularly because removing a lis pendens can be a difficult and occupying endeavor, potentially delaying your closing. Nonetheless, there is a common misconception that should be addressed before continuing on the subject of lis pendens, which is the misunderstanding that liens and lis pendens are one and the same. That simply isn’t true.
A lien is a legal right of a creditor to keep possession of or sell property belonging to another party (a debtor) until the debt owed to that person is discharged or the debtor meets the obligations of the loan contract. However, lis pendens is a Latin phrase meaning “a suit pending.” Nationally, a lis pendens is a written notice showing that a lawsuit has been filed regarding real estate, whether it has to do with claims of ownership or the title of the property. In the state of Colorado, a lis pendens serves as a notice of pending litigation. Likewise, the notice of lis pendens informs anyone who may acquire an interest in the property during the pendency litigation that he/she will be bound by the outcome of that litigation. Removing a lis pendens becomes complicated because of the “notice” nature of the document. Only when the property is “released” from the lis pendens in a specific, statutorily prescribed method will it be possible for a property to be free of the litigation’s outcome.
Normally, at the outset of litigation, an attorney will determine whether the subject matter of the case affects the title of the case. If the subject matter does affect the case, a notice of lis pendens is recorded in the land records of the clerk and it’s recorded for the country where the property is located. The title of the real property can be affected under numerous circumstances, including foreclosure, adverse possession claims, fraudulent conveyances, property partitions, etc. After the notice of lis pendens has been recorded, it triggers the operation of the common law lis pendens doctrine.
The common law doctrine of lis pendens is a general rule requiring that all purchasers of real property take title subject to lawsuits affecting the title. With or without notice, purchasers of real property will acquire the title the seller has to convey. The title may be affected by the outcome of a lawsuit, resulting in serious consequences for the purchasers.
Colorado developed the notice of lis pendens in order to limit the severity of the doctrine. Because of this, Colorado has been able to provide purchasers with a fair opportunity to perform their due diligence on the risks associated with property title acquisition, which doesn’t exist in common law.
Since the notice of lis pendens is a notice and not a lien, it expires and doesn’t require removal. Liens can be removed with a document that properly “releases” the lien. A lis pendens, however, must expire and cannot be removed. Many incorrectly believe the “Release of Lis Pendens” will solve the title issue, but it doesn’t, in and of itself, expire a lis pendens. There are additional steps, including a potential court order and the lapse of the appeal period before the lis pendens will expire. Removing a notice of lis pendens requires a well-rounded analysis of the case, which will support necessary conversations that must transpire between litigation attorneys and your title company.
Assured Title Agency can rescue you from the heartache of having to deal with a notice of lis pendens. If you spot a lis pendens on your title work, reach out to Assured Title Agency immediately and find out what we might require from you so that we can start the conversation and resolve the title issue.
Assured Title Agency is a Denver, Colorado-based title insurance company dedication to provided the highest quality customer service and peace of mind when conducting complex real estate transactions. Be sure to visit our websites: and . #titleinsurance #Denver #BeAssuredNow