The filing of a lis pendens notice is one of the most often used methods in real estate litigation. Lis Pendens notices are frequently misused to intimidate or control property owners, resulting in a lack of appropriate use. This post discusses the purpose of Lis Pendens Notice of Texas and proposes new strategies to decrease their frequent abuse.
What Is a Lis Pendens Notice?
The Latin phrase “lis pendens” means “pending suit.” Notices of lis pendens are recorded in the real estate records to inform third parties—mostly potential buyers of real estate—that the property in question is the focus of ongoing legal action.
Lis pendens notices are filed by individuals who claim an interest in property but do not currently own it outright. The purpose of this notice is to guarantee that, if the property is sold to a third party while the lawsuit is still pending, the new owner will be liable for the claim made in the complaint.
When Should a Lis Pendens Notice Be Filed?
Lis pendens notices are only permitted under the Texas Property Code if an underlying lawsuit is pending and asserts a claim about one of three things: (1) title to the real property. (2) the creation of an interest in the real property. (3) the enforcement of an encumbrance (such as a lien) against the real property.
According to Texas courts, the lis pendens notice must be due to a direct claim to the property. It is not permissible to limit the assertion of property interest to sue the landowner for damages or other collateral remedies.
What Happens If a Lis Pendens Notice Is Wrongfully Filed?
Section 12.0071 of the Texas Property Code outlines the process for expelling or eliminating an invalid lis pendens notice. The property owner must apply to purge the lis pendens in the court where the original case is continuing to start the process.
Above all, if there is no true property claim in the pleading upon which the notice is based, or if the claimant cannot demonstrate by a preponderance of the evidence that the claim is probable, the property owner has the right to have the lis pendens withdrawn.
While the Texas Property Code offers a procedure for dealing with an improper lis pendens notice, it only permits the expungement of the notice if a movant is successful; it does not permit the recovery of legal costs, sanctions, or any other financial compensation against the party that filed the lis pendens notice in error.
Furthermore, before the court will even consider the request to expunge, the party filing it must wait at least twenty days after filing it due to notice requirements in the Texas Property Code. Put another way, the lis pendens notice will be in the real property records for a minimum of twenty days, regardless of its legitimacy.
Do the Current Laws Have Enough Power to Prevent Incorrect Lis Pendens Notices?
For a property owner, a lis pendens notice can lead to several issues. A Lis Pendens notice can hinder a real estate transaction, as potential buyers avoid purchasing property due to legal action. The Lis Pendens notification may suggest that the property is the subject of a lawsuit, despite it being unrelated.
The reason Lis Pendens notices misuse so frequently is precisely because of this fallacy. The party submitting the notice is aware of this consequence and intends to use it as leverage in the ongoing legal dispute with the property owner.
Regretfully, there are not many deterrents in place under Texas law currently to stop this kind of abuse. The Texas Property Code prohibits property owners from receiving attorney’s fees or other financial relief after expunging the notice. A wrong lis pendens notice is likely to impact the property owner because of Section 12.0071’s 20-day notification requirement.
The owner may incur significant legal fees to revoke the lis pendens notice, preventing a quick closing and potentially saving the pending sale.
In Texas, a wrongfully filed lis pendens notice can lead to property loss or harm to the property owner. Remedy options include a motion for sanctions under the Texas Rules of Civil Procedure or Texas Civil Practice & Remedies Code, but these courts may be reluctant to grant relief unless it’s an extreme misconduct case.
FAQs
What is the Texas lis pendens form?
A notice of intent to sue (lis pendens) must contain the following information: the name and address of the party filing the lis pendens, the name and address of the party being sued, a description of the property, the case name and number, the court where the action has been filed, and the date of the filing.
What occurs in Texas following the filing of a lis pendens?
A buyer cannot, by definition, be a BFP if a lis pendens is validly filed because the filing has given constructive notice; at most, the buyer becomes a purchaser pendens lite, which means that title is taken subject to the resolution of the lawsuit (Prop. Code Sec. 13001).
What is the rule of Pendens?
The “Lis pendens doctrine” allows for the dismissal of a following action when there are two or more cases ongoing. Its purpose is to shield a defendant from having to simultaneously defend multiple lawsuits alleging the same cause of action.
In Texas, what is an abstract of judgment?
An abstract of judgment is a document that exists in the property records of a county. To enable accurate indexing, this document includes information about the debtor and the judgment. Upon the recording and indexing of an abstract of judgment, the defendant’s nonexempt real estate is liens.
Conclusion
Texas Property Code amendments that provide attorney’s fees for successful expungement motions would help landowners fight incorrect lis pendens notices. Massachusetts, Washington, California, and New York have all passed legislation along these lines. Property owners can now directly claim damages for erroneous Lis Pendens notices, eliminating the “absolute privilege” defense. Courts will take action against parties or attorneys who file expunge applications, so shortening notice time could expedite proceedings.
