Many misunderstand the effect of recording a notice of
pendency of action, which is also known as a lis pendens, and a typical inquiry is whether the claimant can
record a lis pendens to "stop a
sale". Although recording a lis pendens often has the effect of
preventing the closing of a sale, it is because of its practical effect on
title companies and buyers, and it is not a legal prohibition on a sale. It is simply a notice that a legal action is
pending, and of course, a legal action must be filed before a lis pendens based upon the action can be
recorded.
In California, recording a lis pendens simply gives constructive notice that a legal action
has been filed affecting title or right to possession of the real property
described in the notice. Any taker
(i.e., buyer or lender) of a subsequently created interest in that property
takes his interest subject to the outcome of the litigation. It is this uncertainty that has the practical
effect of discouraging any purchase or loan after it is filed.
In order to record a lis
pendens, the legal action must assert a real property claim, such as a
quiet title or partition action. Other
legal actions such as a divorce or partnership dispute involving real property
can support a lis pendens.
A "court shall order" expungement of a lis pendens if the pleading on which the
lis pendens is based does not state a
real property claim, if the claimant fails to establish the probable validity
of the claim on which the lis pendens is
based, or if the giving of an undertaking (i.e., bond) would secure adequate
relief to the claimant.
If a party alleges that a lis pendens is "void and invalid" (under Code of
Civil Procedure § 405.23) because of defective service,
the party may move the court to expunge it.
Any notice of pendency of action shall be void and invalid as to any
adverse party or owner of record unless the requirements of Code of Civil
Procedure § 405.22 are met for that party or owner, and a proof of service in
the form and content specified in Code of Civil Procedure § 1013a has been
recorded with the lis pendens. I have reviewed lis pendens recorded by licensed attorneys that do not include a
proof of survive, or the proof of service is defective.
Section 405.22 requires the claimant filing a lis pendens to serve the parties to whom the real property claim is
adverse and to all owners of record of the real property affected by the real
property claim as shown by the latest county assessment roll by registered or
certified mail, return receipt requested, at all known addresses.
If the county assessor lacks a known address for a party or owner, the
claimant may file a declaration to that effect in lieu of the mailing that
would otherwise be required. Service
shall also be made immediately and in the same manner upon each adverse party
later joined in the action.
In the recent decision of Rey
Sanchez Investments v. Superior Court (PCH Enterprises, Inc.), the
appellate court held the subject lis
pendens was void and invalid because (1) no proof of service was recorded
with the lis pendens, and (2)
noncompliance with section 405.22 occurred
because after the petitioner
became a party to the action, service of the lis pendens was not made in the same manner as required by 405.22,
and it was not made immediately upon the petitioner.
A lis pendens that is void
and invalid under section 405.23 does not need to be expunged in order for it
to be void and invalid, as that status exists ab initio, in those cases where no proof of service is recorded or
the service is defective.
In my experience, the typical defect in the service is service by
regular mail, and not by registered or certified mail, return receipt requested,
at all known addresses, before the lis pendens is recorded.
Lessons:
1. A lis pendens can be very effective at clouding title, and
discouraging a purchase or loan
2. A lis pendens requires a filed legal action that asserts a real
property claim
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