WHAT IS A LIS PENDENS?
A lis pendens is a legal document filed in the chain-of-title of a real property that is the subject of, or which is affected by, a pending lawsuit. The lis pendens is a “place marker” that gives notice to the world of the existence of the lawsuit affecting the property. Once properly recorded and indexed, the lis pendens acts similar to a lien in encumbering title to real property.
The filing of a lis pendens is specifically authorized by statute. Pending the outcome of an action involving proper title to, establishing an interest in, or enforcing an encumbrance against real property, the party seeking relief may file a notice of lis pendens in the county’s real-property records. See TEX. PROP. CODE § 12.007(a).
REQUIRED CONTENTS OF A NOTICE OF LIS PENDENS
Texas Property CodeSection 12.007(b) requires that a lis pendens state:
(1) the style and number, if any, of the proceeding;
(2) the court in which the proceeding is pending;
(3) the names of the parties;
(4) the kind of proceeding; and
(5) a description of the property affected.
In addition, the lis pendens must be signed by the party filing the lis pendens, or an agent or attorney for that party.
FUNCTIONS OF A RECORDED LIS PENDENS
A notice of lis pendens broadcasts “to the world” the existence of ongoing litigation regarding ownership of the property. TEX. PROP. CODE § 13.004(a). When the notice is properly filed, even a subsequent purchaser for value does not take the property free and clear. See id. § 13.004(b).
The Texas Supreme Court has explained that a lis pendens functions to:
- provide constructive notice (See Lee v. Salinas, 15 Tex. 495, 498 (1855);
- avoid undue alienation of property (See Rippetoe v. Dwyer, 65 Tex. 703, 707 (1886); and
- facilitate an end to litigation (See City Nat’l Bank v. Craig, 113 Tex. 375, 257 S.W. 210, 211 (1923) (citing Lee, 15 Tex. at 497 and Rippetoe, 65 Tex. at 707)).
By providing a mechanism for constructive notice of an action involving real property, the Texas Property Code protects the claimant’s alleged rights in the disputed property. Collins v. Tex. Mall, L.P., 297 S.W.3d 409, 418 (Tex. App. — Fort Worth 2009, no pet.).
HOW MAY A DEFECTIVE OR INVALID LIS PENDENS BE EXPUNGED?
The Property Code provides a procedure by which another party to the action may seek to have the notice of lis pendens “expunged,” that is, “erase[d] or destroy[ed].” TEX. PROP. CODE § 12.0071; Expunge, BLACK’S LAW DICTIONARY (10th ed. 2014).
The statute requires the trial court to order a lis pendens notice expunged if “the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim.” TEX. PROP. CODE § 12.0071(c)(2). The claimant must therefore satisfy a threshold showing on the merits of its real-property claim to continue to encumber the property while a suit is pending.
Specifically, the trial court may expunge a notice of lis pendens if:
(1) the pleading on which the original order rests does not include a real-property claim;
(2) the claimant does not appropriately establish the probable validity of his real-property claim; or
(3) the claimant fails to serve a copy of the record notice on all entitled to receive it.
See TEX. PROP. CODE § 12.0071(c)(1)-(3)
If the claimant cannot muster sufficient evidence to overcome the § 12.0071(c)(1)-(3) analysis, an expunction order will be entered by the trial court.
EFFECT OF EXPUNCTION OF LIS PENDENS
After a certified copy of an order expunging a lis pendens has been recorded, the notice of lis pendens and any information derived from the notice:
(1) does not:
(A) constitute constructive or actual notice of any matter contained in the notice or of any matter relating to the proceeding;
(B) create any duty of inquiry in a person with respect to the property described in the notice; or
(C) affect the validity of a conveyance to a purchaser for value or of a mortgage to a lender for value; and
(2) is not enforceable against a purchaser or lender described by Subdivision (1)(C), regardless of whether the purchaser or lender knew of the lis pendens action.
TEX. PROP. CODE § 12.0071(f)(1)-(2).
Notably, expunction of the lis pendens is a restoration of the chain of title free of the record notice of a potential claim of interest associated with the lis pendens. However, it is not an adjudication of a later purchaser’s status as a bona-fide purchaser under any set of circumstances.
A lis pendens is a powerful tool that protect’s a claimant’s interest in real property titled to another. It can prevent the transfer or encumbrance of the property while a suit is pending. However, there is significant potential for abuse of the lis pendens procedure.
The Texas Legislature has developed a strict scheme for filing, maintaining and removing lis pendens.