Check out the NEW LLC Formation Video Suite: The DIY LLC Solution from Attorney Nate Gilbert. Summer Exclusive Offer - $200 off, click here!

What is Lis Pendens?

LLC Investor Resources

Attorney Nate Gilbert

Under the Texas Property Code, Chapter 12, Lis Pendens is a notice that a person may file with the County Court where a property is located in order to assert their claim to all or part of the title to that property.  Essentially, it is a notice that there is some pending civil action in which the title to the property is in dispute.  This dispute can involve either the enforcement of an encumbrance, such as an easement, or the actual establishment of an interest in the property itself.

Click Here – How to Form an Asset Investment LLC?

Lis Pendens is NOT applicable to claims of a monetary interest in the property, such as a lien or suit involving money.  Most commonly, Lis Pendens are used as a tactic by buyers in disputes regarding earnest money in order to disrupt the sale to the subsequent potential buyer.  It should be noted that this is not only an incorrect use of Lis Pendens, but subjects the filer to fairly harsh penalties under Texas law.

The notice or affidavit constituting the Lis Pendens is only in effect for as long as the civil action it is a part of is pending, and is not a claim in and of itself.  The Lis Pendens terminates as soon as the Court renders a verdict—The party will either have established or failed to establish their claim to the property.

Lis Pendens can hold up the sale of a property to an unrelated buyer.  The Lis Pendens blurs the lines on title and makes any buyer hesitant to hand over money for title which may or may not be legitimate.  Except in rare circumstances, the purchaser’s attorney will likely advise against the purchase while a Lis Pendens remains on the property.

If you have questions about Texas Business Law, or would like to consult with an attorney regarding your asset issue, The Law Office of Nathaniel Gilbert offers free consultations for investor clients. If you’d like to learn more about Texas business Law, Click Here.

Nathaniel Gilbert

Nathaniel Gilbert is the sole attorney at The Law Office of Nathaniel Gilbert, PLLC. Practicing in the areas of Business Law, Nate assist clients with LLC formation and drafting contracts in the states of Texas, Colorado, and Kansas. He can be reached at 726-999-0087.

Tags