February 16th, 2021 at 11:09 am
Multiple Choice Question: What is a lis pendens? Pick the best answer:
A. A lawsuit brought by a buyer against a seller.
B. A notice recorded against a property prohibiting any subsequent sale.
C. A notice recorded against a property of a pending litigation.
D. Disallowed under the RPA because a buyer must first attempt mediation and/or arbitration.
Answer: Answer A is wrong. A common misunderstanding among agents is that a lis pendens is a lawsuit. It is not. A lawsuit commences with the filing of a Summons and Complaint in Superior Court. Only after that lawsuit has already been filed can the party suing then file a separate notice of lis pendens over at the County Recorder’s Office.
Answer B is also wrong. A notice of lis pendens does not specifically prohibit anything. It is just an announcement to the world that any subsequent interest to the property shall be taken subject to the results of a pending lawsuit. Although a new buyer could theoretically acquire a property with a recorded lis pendens, most buyers would not want to do that. Additionally, the title insurance company insuring title and the buyer’s lender may also be reluctant to get involved with a sales transaction with a recorded lis pendens.
Answer C is the correct answer. A “lis pendens” is Latin for “lawsuit pending.” A notice of lis pendens should only be filed against a property if the underlying lawsuit pertains to ownership or possession of the property.
Answer D is wrong. The filing of a lawsuit to record a notice of pending litigation is specifically excluded from the mediation and arbitration requirements in the C.A.R. Residential Purchase Agreement (RPA) (see paragraph 22C(2)).
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