PENNSYLVANIA LIS PENDENS: A SIMPLE BUT OFTEN MISUNDERSTOOD REAL ESTATE & LITIGATION TOOL

Friday, August 12 2022 19:50 Written by  Gabriel Montemuro

If you work in the Pennsylvania real estate market, chances are you may have encountered the lis pendens doctrine. Lis pendens is a latin term that roughly translates to “notice of a pending legal action”. As its translation indicates, the purpose of a lis pendens is to give notice to a third-person (typically a potential buyer) that a certain parcel of real estate is subject to a pending lawsuit and that any interest a buyer acquires in that real estate will be subject to the result of the pending legal action.

In its most practical sense, a lis pendens is a written filing indexed against a parcel of real estate such that any potential buyer will be made aware that there is an ongoing dispute relating to title of the property. This effectively precludes a transfer of real property since any potential buyer would then own the property subject to the cloud on title.

The doctrine of lis pendens does not originate from a Pennsylvania statute, which means there is no definitive writing to clearly set forth who is entitled to a lis pendens and how indexing a lis pendens impacts a certain parcel of real estate. Instead, the doctrine originates from common law, which means its application and function have been tweaked and clarified over time through judicial opinions. As a result, many people are familiar with the general concept of lis pendens but are unfamiliar with some of its finer points.

First, a filed lis pendens does not create a lien against the affected real estate. A judgment or court order may be entered in the underlying lawsuit awarding money damages, which would operate as liens against the property, but the lis pendens itself is only filed to put other third parties on notice that interests in the real estate are being disputed.

Second, a lis pendens does not bar the affected real estate from being sold. While in most cases it may be a risky endeavor, a third party remains free to buy the property subject to the litigation. For example, a potential buyer could review the underlying lawsuit and decide the would-be seller will prevail, and thus become comfortable with purchasing the real estate subject to the lis pendens.

Third, many people consider lis pendens as something that may be filed with respect to any lawsuit generally involving real estate. However – like most things in the law – it is a little more nuanced than that. A Lis pendens is only appropriately entered where specific rights in the real estate are at issue, such as title or the right of possession. Lis pendens cannot be lawfully entered based on an underlying lawsuit that indirectly involves the property or a lawsuit that is only seeking money damages.

From a buyer’s perspective, one would be wise to avoid purchasing any property subject to a lis pendens, or, at the very least, certainly consult with an attorney before doing so.

From a litigant’s perspective, a lis pendens can be a helpful tool to preserve interests in real estate while a lawsuit is pending, but you need to know when a lis pendens is appropriate and what it can accomplish.

Real estate litigation is complex and fact-intensive. Anyone finding themselves in a real estate dispute would be wise to consult with an experienced legal professional to evaluate his or her options. Antheil Maslow & MacMinn, LLP has direct experience navigating real estate disputes and the wide range of issues that can arise from them.

Last modified on Friday, August 12 2022 19:59
Gabriel Montemuro

Gabriel Montemuro

Gabe’s practice focuses on litigation, including commercial litigation, personal injury, estate and employment law.  He represents clients regarding business disputes such as contract and employment issues, real estate litigation and fraud claims.  Gabe also works with clients to provide assistance with land use and zoning issues such as land development approvals, variances, special exceptions and conditional use approvals.  He represents parties in real estate purchases and sales, including agreements of sale, where he guides clients through the process to complete all obligations, responsibilities and contingencies to the agreement and provides oversight during the closing process.

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