When you are purchasing a property you will need to do a title review. If in your title review you come across the term ‘lis pendens’ be very wary. A lis pendens notice recorded against the property means that the property is involved in litigation. The lis pendens puts everyone, including you, on notice that there is a pending lawsuit related to ownership of the property. If you see the term lis pendens you probably should walk away from the whole matter.
In a recent Oklahoma case some new buyers inexplicably ignored a lis pendens notice and went ahead and closed on a condo property. A court later found that the person who filed the lis pendens was entitled to the property. In a second action, the court found that the new buyer’s interest in the condo was void. They were out their money and out their property. (Bank of Commerce, 256P.3d 1053, 2011.) Again, the lis pendens notice is a matter of public record. You are charged with reviewing and understanding the public record. Closing on a property involved in litigation as to its ownership is one of the biggest mistakes you can make in real estate. And, as the Oklahoma case highlights, it does happen. And when it does, later buyers will lose what they paid for.