The lis pendens is a document that gets filed in a lawsuit and is recorded in the public records to tell those searching the title to a property that there is a lawsuit concerning that property.
Documents filed in lawsuits reside in the Clerk of Court’s records. Title to real property lives in the public or official records of a county in Florida. A lis pendens links the two document repositories.
It is said to create a cloud on the title to the real property. Section 48.23 of the Florida Statutes and cases interpreting that Statute control lis pendens and their removal.
The two types of lis pendens in Florida
In Florida, there is a lis pendens of right and a garden variety lis pendens. The first is for lawsuits based on a recorded instrument like a deed or mortgage and are commonly found in mortgage foreclosures. The important distinction between it and the garden variety type is that the lis pendens of right does not require a bond to keep it in place whereas the garden variety type does.
But just because a lis pendens of right does not require a bond does not mean that all other lis pendens that are filed are proper or can simply be kept in place with a bond. In order to have the legal right to file a garden variety lis pendens the party that filed it still must prove a nexus or connection between their lawsuit and the real property. If this nexus is established then the lis pendens can stay with a bond that must be revisited each year as the case progresses. Section 48.23(2) of the Florida Statutes specifically limits the lifespan of a garden variety lis pendens to one year but it can be renewed at that point unless the facts underlying it have changed. If the required nexus is not proven then the lis pendens must be dissolved.
What happens if a lis pendens is wrongful?
A lis pendens is a pleading filed in a lawsuit. It is normally filed at the beginning of the case and more often together with the filing of the complaint. It can be filed later but the point of a lis pendens is to put those searching the title on notice that the property is the subject of a lawsuit so filing it as close as possible to the institution of the lawsuit affecting the property would put prospective purchasers on notice.
Notice in purchasing real property is paramount. If a contractor for example is not paid for work contracted on a house by the owner and elects not to file a lien then a buyer would purchase the property free and clear of the contractor’s claim because the buyer had no notice. The buyer would be termed a bona fide purchaser in that instance. If, however, the contractor in this example timely files a lien then the buyer would be able to find that lien with a title search and could still buy the property but would receive the title subject to the lien. The failure to perform a title search does not protect the buyer either but ordinarily title companies will perform a search, find the lien, and require that it be satisfied at closing so their mortgage has priority and they are protected in their investment.
If a lis pendens is not one of right and the lawsuit has no nexus to the property then the lis pendens is wrongful. But a wrongful lis pendens is still recorded in the public records and affects the title to the property for a time. So in order to get rid of a wrongful lis pendens the defendant in the lawsuit must file a motion to dissolve the lis pendens and bring that before the judge in a hearing.
How do you dissolve a wrongful lis pendens?
The judge in the case has the discretion to dissolve a wrongfully filed lis pendens. Judges do not normally act on their own or sua sponte. Judges react to and decide motions that are brought before them in a hearing. The party seeking to dissolve the lis pendens must file a motion defining why the lis pendens is neither one of right nor one with a nexus to the property. The movant will normally also ask for a bond in the event that the judge does find a nexus exists.
Determining whether the lawsuit is based on a duly recorded instrument like a deed or mortgage is normally straightforward. Either there is such an instrument on which the lawsuit is based or there is not. But evaluating whether there is a nexus or connection between the lawsuit and the real property requires a deeper evaluation by the judge.
If the judge finds that there is no nexus then the judge orders the lis pendens dissolved and that order balances the lis pendens that was recorded in the public records. But if the judge finds a nexus to support the lis pendens then the judge must determine the amount of the bond that the party who filed the lis pendens must pay in order to maintain the lis pendens and the timing of such payment.
The imposition of the lis pendens bond is done just like an injunction. In fact Section 48.23(3) of the Florida Statutes expressly instructs courts to handle the imposition and dissolution of lis pendens in the same manner as injunctions. This often means that the judge must hold an evidentiary hearing and receive testimony and documents from the parties in something that is like a mini-trial.
If the parties cannot agree on a bond in advance then side one argues for a lesser bond and one for a greater. The judge weighs the evidence and determines the amount, when that must be paid, and any other conditions warranted by the circumstances. If the bond is paid then the lis pendens stays. If the bond is not paid, then the lis pendens is dissolved for failure to comply with the bond order.
What are the liabilities for wrongfully filing a lis pendens?
A wrongful lis pendens can subject a party to liability. Because the lis pendens impacts the title to property a wrongfully filed lis pendens can support a claim for slander of title. Slander is spoken defamation and libel is the written form but in common parlance these two types of defamation are sometimes simply called slander.
Slander of title is the name given to a claim where title to real property is wrongfully smeared or besmirched such as with a wrongful lis pendens. Because slander of title is a tort claim it can carry with it the possibility of punitive damages. A wrongful lis pendens can subject the filing party to other claims besides slander of title but that is the most common response.
In sum a lis pendens is a mechanism to connect the title to property with the court’s records to tell anyone searching the title that there is a lawsuit over the property. Whether the lis pendens is proper or requires a bond to be maintained while the lawsuit is going on are decisions that the judge must make when a party in the suit brings that before the judge by a proper motion.
If the judge decides that the lis pendens was not proper then the party that filed it can suffer liability for filing it. That liability can be more localized to the filing or it can be broader and create liability for detrimentally impacting the title to the property.
Section 48.23(1)(c) of the Florida Statutes defines what information must be contained in a lis pendens, however, whether to file such document in a lawsuit should be done only after thorough consultation with an experienced and qualified attorney. Call us at 561-838-9595 or email us at [email protected] to schedule your free consultation.