Lis Pendens

Lis pendens is a Latin term meaning "suit pending" and refers to a formal notice filed in the public records that alerts potential buyers, lenders, and other interested parties that a lawsuit has been filed involving a specific property. This notice serves as a warning that the property's title or ownership is in dispute and any transaction involving the property may be affected by the outcome of the litigation.

For tax lien and tax deed investors, encountering a lis pendens during due diligence is an important red flag. A lis pendens may indicate ongoing litigation related to ownership disputes, divorce proceedings, boundary disputes, fraud claims, or challenges to a prior tax sale. Investing in a property with an active lis pendens adds significant risk, as the outcome of the lawsuit could affect the investor's rights.

In some cases, a lis pendens is filed as part of the tax foreclosure process itself. When a tax lien holder initiates foreclosure, they may file a lis pendens to put the world on notice of their claim. This is a normal part of the process and does not indicate a problem with the investment.

Investors should always check for lis pendens filings as part of their title search. These records are typically available through the county clerk's or recorder's office. If a lis pendens is found, it's advisable to consult with a real estate attorney to understand the nature of the lawsuit, the potential outcomes, and how it might affect your investment before proceeding.