What is lis pendens and what does it mean to real estate investors and homeowners? How can you remove false claims on your title?

What is lis pendens and what does it mean to real estate investors and homeowners? How can you remove false claims on your title?

First of all, THANK YOU again for making this channel the number one channel for Indiana real estate on YouTube according google analytics and SocialBlade info for BigReia.com.

I’m including BOTH of the videos above, even the one about my good friend Liz Pendeez, and as the kids were saying “Pendeez Nutz”… Wow.

More on some BigReia Money!

What is “lis pendens” and what does it mean?

You can watch the videos above here on the page or on YouTube here is the lis pendens explained video and the video on how to remove false claims on your title.  They have the same content but I corrected some things in the second video and I THOUGHT the first one was taken down.  Apparently not lol.

Let’s get started…

A ‘notice of lis pendens’ means there is a pending lawsuit on a real estate property, against the title.  This can cause issue for the owner/investor if they want to sell or refinance because there there is a cloud (any claim) on a title.  

This means the title is not “clean”.

Just so that we are being clear on something…

A ‘notice of lis pendens’ means there is a pending lawsuit in the form of a claim on a property that someone has filed with the courts, most often the county courts.  This is ALSO a notice, by nature of and process of being officially filed, that the title is now “clouded”.  

That means the title is not clean and it must always be clean before the owner can do anything like sell, refinance, etc.  

Why do these claims get filed on a title or property?

This happens when there is a fight over ownership of the property. This could be the beginning of a foreclosure, a nasty divorce, unpaid civil matters, money owed to the IRS, family inheritance issues, etc.

OR it could be someone scamming the owner and simply clouding their title to get paid off.

Usually the title is clouded by the bank or lender who provided the mortgage because the owner is behind on payments.  This class is not about removing legitimate claims like that, this is about understanding the lis pendens details and removing FALSE claims on your title.

Traditionally you can still work with a clouded title in some cases.  You can still buy a property with a clouded title BUT you’re subject to the outcome of the pending lawsuit.  Plus, it won’t be able to be
mortgaged.

The steps in removing a false lis pendens on the title:

First step here is to ensure the lis pendens hasn’t already been nullified by a time expiration. In some states if the lis pendens is expired without renewal, the state’s statute of limitations laws inherently void out the original lis pendes claim and nullify it. 

I have seen a few cases where this tiny bit of research paid off and we were able to get the claims removed.  They may come back and try to file again but that is a separate issue.

Here’s a second step in removing false claims on your title:

If you’re working with a clouded title due to a notice of lis pendens, and it is not a matter of the actual property (such as money owed to the IRS on an income property) a written letter demanding the claim be removed to the party that filed against the title is the second step.

Third is that in some states this becomes a civil matter of another sort.  In that case the plaintiff may be required to pay the court costs of the defendant and a slander of title suit may follow next.  This would be filed by the defendant as well as the plaintiff possibly facing criminal charges.

After this letter has been sent and if there is no resolve, proof of this not being a legitimate claim should be taken to court, asking the judge to order removal of lis pendens on the property.

How do I get a list of properties that have a lis pendens filed on them?

For investors this could mean getting a list of properties with clouded titles can be done easily as they
are public record, and available at your local courthouse.  You can work with these homeowners and potential sellers and seeing if they want to sell, do a lease option, stay in the home, etc. 

There are many ways to create Win/Win/Win deals helping these folks out.

Okay so that is how a lis pendens works and how to remove false claims on your title …

There are a lot of other helpful resources in some or our other posts.

On our EPIC page on the “100 FREE Ways to Find Motivated Sellers” we go over a lot of ways to help sellers in trouble.  Keep in mind these homeowners are usually going through some rough patch in their lives so be that light at the end of the tunnel for them.  Help people, help people.

There is a great post and class on the 38 Ways to Buy Apartment Buildings Zero Down with Pet Policies

The post is HERE.

Thanks so much!  = )

Make the Universe Smile.

~ Indy Anna
Love (at) BigReia.com
(317)969-5619 (that’s my cell phone and yes I actually answer lol)