Partnerships in the Real Estate Industry: What is a Lis Pendens?
South Florida has one of the most dynamic real estate markets in the entire country. Are you a partnership that is invested in real estate? It is crucial that you have an understanding of the laws and regulations that could affect your business. A key thing to be aware of is whether properties you are considering investing in are subject to a legal claim. Here, our West Palm Beach partnership lawyer for real estate businesses highlights key things to know about properties in lis pendens.
Lis Pendens: Defined
Lis pendens is a Latin term that can be translated to mean “suit pending.” In effect, it is a legal notice filed into the public record that a specific property is involved, in some manner, in litigation. Among other things, this notice is designed to warn potential buyers/financiers that the property is subject to an ongoing legal dispute that could, potentially, affect title or ownership.
For example, if a property seller is entangled in a lawsuit alleging that they do not have the rightful ownership to sell, a lis pendens would be filed to alert any potential buyers or lenders of the ongoing legal challenge. Alternatively, if a contractor files a lien against property for alleged non-paid work, lis pendens would make a potential buyer/investor aware of that claim.
Interested in a Property in Lis Pendens? Three Steps to Take
Are you and your business partners considering buying or investing into residential or commercial property that is subject to litigation? Here are three key steps to take before moving forward:
- Confirm there is a Genuine Existing Claim: Before proceeding, verify the authenticity of the lis pendens notice. Among other things, you should check court records to ensure that there is an active lawsuit directly involving the property in question.
- Get Details as to Nature and Status: Understand the specifics of the legal dispute. This includes identifying the parties involved, the basis of the claim, how it relates to the property’s title or usage, and other key matters.
- Be Cautious About Investing: Investing in a property under litigation involves higher risks and potential for unexpected complications. A business lawyer can help you assess the situation, including the risks of investment. Your attorney can provide guidance.
The reality is that moving forward with an investment into a property that is subject to lis pendens can lead a real estate partnership into a complex business dispute. It is best to consult with a lawyer.
Consult Partnership Law Attorney for a Confidential Consultation
At Pike & Lustig, LLP, our Florida partnership lawyers have the skills and experience to work with companies in the real estate industry. If you have any questions about a dispute over a commercial matter, we are here as a legal resource. Contact us today for a completely confidential case review. We work with real estate businesses throughout South Florida, including in Miami, West Palm Beach, Fort Lauderdale, and Jupiter.
