What Is Lis Pendens?
A lis pendens ("suit pending" in Latin) clouds title and tells buyers and lenders that a lawsuit could change who owns the property or what encumbrances attach to it. It's filed when someone sues over foreclosure, a partition action, a boundary dispute, a contract dispute, or an ownership claim. The notice doesn't create a lien—it just publicizes the lawsuit. But it deters buyers, blocks refinances, and can force a sale at a discount. Savvy investors sometimes buy properties with lis pendens at a steep discount, but the risk is high: you're betting on the lawsuit's outcome.
A lis pendens is a notice filed in the county land records that a lawsuit involving a specific property is pending—putting the world on notice that the property's title may be affected by the outcome.
At a Glance
- What it is: Public notice in county records that a lawsuit involves the property
- Why it matters: Clouds title; deters buyers and lenders; can create discount opportunities
- How to find it: County recorder search, title report
- How to remove: Resolve the lawsuit, or file a motion to expunge if the suit lacks merit
How It Works
What triggers a lis pendens. Any lawsuit that affects real property can support a lis pendens. Common triggers: (1) Foreclosure actions—the lender files when the borrower defaults; (2) partition actions—co-owners suing to force a sale; (3) boundary disputes—neighbors fighting over lot lines; (4) contract disputes—buyer or seller suing over a failed deal; (5) mechanic's lien foreclosure—contractor enforcing unpaid work; (6) divorce or probate—ownership disputes. The plaintiff (or their attorney) files the lis pendens with the county recorder. It's indexed against the property's legal description.
Effect on the property. The lis pendens doesn't create a lien or transfer ownership. It puts future buyers and lenders on notice: if you buy this property, you take it subject to the lawsuit's outcome. That means a buyer could close, then lose the property if the plaintiff wins. Lenders won't fund a purchase or refinance with an unresolved lis pendens—too much title risk. The property becomes hard to sell and hard to refinance until the suit is resolved.
How to find one. Order a title search or run a search at the county recorder's office. Lis pendens are recorded documents, usually searchable by address, parcel number, or owner name. Many counties have online search portals. Your title company will flag lis pendens in the preliminary report—read it before you remove contingencies.
How to remove it. Two paths: (1) Resolve the lawsuit—settlement, judgment, or dismissal. Once the case is over, the lis pendens can be released or expunged. (2) Motion to expunge—if the lawsuit doesn't actually affect the property's title (e.g., it's a personal injury case mistakenly filed against the property), you can ask the court to remove the lis pendens. The standard varies by state; some require the plaintiff to post a bond if the lis pendens is expunged.
Real-World Example
Marcus in Memphis. Marcus found a 4-plex in Binghampton listed at $185,000—about 20% below recent comps. The title report showed a lis pendens from 8 months earlier: a contractor had sued the owner for $34,000 in unpaid renovation work and filed a mechanic-lien plus lis pendens. The owner had countersued. The case was still pending. Marcus's lender wouldn't touch it. He negotiated an all-cash deal at $162,000—another 12% off—contingent on the contractor settling. He offered the contractor $18,000 to release the lien and dismiss the suit. The contractor took it (better than years of litigation). Marcus closed 6 weeks later. The lis pendens was released. He'd bought at a 28% discount to list price. High risk, high reward—he'd done the homework on the lawsuit and had the cash to move fast.
Pros & Cons
- Puts the world on notice—protects the plaintiff's claim against later buyers
- Creates discount opportunities for investors who can assess and absorb lawsuit risk
- Can be expunged if the suit lacks merit, clearing the way for a normal sale
- Public record—easy to discover during title search
- Kills marketability—most buyers and lenders won't touch a property with a lis pendens
- Can block refinances and sales for months or years while litigation drags on
- Buying with a lis pendens means you're betting on the lawsuit—you could lose the property
- Expungement motions cost time and legal fees
Watch Out
- Compliance risk: Filing a lis pendens without a valid lawsuit that affects the property can lead to liability for slander of title. Plaintiffs must have a real claim.
- Modeling risk: Don't assume the lawsuit will settle quickly. Litigation can drag 1–3 years. Your capital is tied up; your exit is blocked.
- Execution risk: Even if you settle with the plaintiff, other parties (co-defendants, other lienholders) may have claims. Get a full title search and clear all clouds before closing.
- Exit risk: If you buy with a lis pendens and the plaintiff wins, you could lose the property or be forced to pay to clear the claim. Model the worst case before you invest.
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The Takeaway
A lis pendens is a red flag on title—a lawsuit is pending that could affect the property. It deters buyers and lenders, which can create discount opportunities for investors with cash and risk tolerance. But buying with a lis pendens means you're betting on the lawsuit. Do the homework: read the complaint, assess the plaintiff's claim, and have a plan to resolve or expunge it. Never assume it'll just go away.