Can You Sell a Property With a Lis Pendens Filed Against It?

When it comes to real estate transactions, the presence of a lis pendens can introduce a layer of complexity that both buyers and sellers need to understand. A lis pendens, often described as a “notice of pending lawsuit,” signals that there is ongoing litigation involving the property in question. This legal notice can significantly impact the sale process, raising important questions about whether a property can be sold while such a claim is active.

Navigating the sale of a property under a lis pendens requires a clear understanding of the legal implications and potential risks involved. Sellers may face challenges in attracting buyers or securing financing, while buyers must weigh the uncertainties tied to the pending dispute. The interplay between the lis pendens and property rights creates a unique situation that demands careful consideration and expert guidance.

In this article, we will explore the fundamental aspects of selling a property with a lis pendens, shedding light on what this notice means for all parties involved. Whether you’re a homeowner, prospective buyer, or real estate professional, gaining insight into this topic is crucial for making informed decisions and avoiding unexpected complications in the property sale process.

Implications of Selling a Property with a Lis Pendens

Selling a property with a lis pendens attached presents significant legal and financial risks. A lis pendens is a public notice filed in the county records indicating that a lawsuit involving the property is pending. This notice effectively warns potential buyers and lenders that the title to the property is under dispute. Consequently, many buyers and financial institutions will hesitate to engage in a transaction until the underlying legal issues are resolved.

One of the primary implications is that the lis pendens clouds the title, making it difficult to transfer ownership free and clear. Even if a seller proceeds with a sale, the new owner might inherit the legal problems associated with the property. This can lead to:

Difficulty obtaining title insurance
Challenges in securing mortgage financing
Potential loss of the property if the lawsuit results in a judgment against the seller

Therefore, a lis pendens serves as a significant deterrent to marketability, often forcing sellers to resolve the dispute before successfully closing a sale.

How to Sell a Property with a Lis Pendens

Although challenging, selling a property with a lis pendens is not impossible. The process typically requires careful navigation of the legal issues involved and full disclosure to all parties. Key steps to consider include:

Legal Consultation: Engage a real estate attorney to understand the specifics of the lawsuit and its impact on the sale.
Disclosure: Inform potential buyers of the lis pendens and provide copies of relevant legal documents.
Negotiation: Some buyers may be willing to purchase the property “as is,” often at a discounted price to compensate for the risk.
Escrow Arrangements: Use escrow accounts to hold funds until the legal dispute is resolved or an agreement is reached.
Settlement or Bonding: In some cases, the seller may post a bond or settle the dispute to remove the lis pendens from the title.

Buyers interested in such properties should conduct thorough due diligence, including reviewing the lawsuit’s status and potential outcomes, to assess the risk involved.

Effects on Financing and Title Insurance

The presence of a lis pendens significantly affects both financing options and title insurance availability. Most lenders are reluctant to finance a property encumbered by a lis pendens because the lawsuit may impair the lender’s security interest. Similarly, title insurers typically refuse to issue policies that cover claims arising from pending litigation.

Aspect	Impact of Lis Pendens	Possible Solutions
Mortgage Financing	Lenders may deny loans or require higher interest rates.	Obtain loan from private lenders or wait for lis pendens removal.
Title Insurance	Insurance companies usually exclude coverage for pending claims.	Negotiate indemnity agreements or clear the lis pendens before closing.
Sale Price	Property value often decreases due to legal uncertainties.	Price adjustments to reflect risk, or resolve litigation before sale.

Understanding these effects is crucial for both sellers and buyers to make informed decisions and mitigate potential losses.

Removing a Lis Pendens to Facilitate Sale

Removing a lis pendens is often the most effective way to restore marketability to a property. The process involves resolving the underlying dispute or legally challenging the validity of the lis pendens filing. Common methods include:

Dismissal of the Lawsuit: If the plaintiff voluntarily dismisses the case or the court rules in favor of the defendant, the lis pendens can be expunged.
Bond Posting: The property owner may post a surety bond with the court, which can lead to the release of the lis pendens while the lawsuit proceeds.
Settlement: Negotiating a settlement between parties can result in a dismissal of the lis pendens.
Motion to Expunge: The property owner can file a motion arguing that the lis pendens was improperly filed or lacks merit.

Each method requires legal expertise and varies by jurisdiction. Prompt action is often necessary to prevent prolonged market disruption.

Risks for Buyers Purchasing Property with a Lis Pendens

Purchasing property subject to a lis pendens carries inherent risks that buyers must evaluate carefully. Some of the primary concerns include:

Title Risk: The buyer might lose ownership if the court rules against the seller.
Financial Exposure: The buyer may incur additional legal costs and delay in obtaining clear title.
Resale Challenges: Future buyers could be deterred by the property’s legal history.
Limited Financing: Difficulty in securing loans or higher interest rates due to the title cloud.

Prospective buyers should consider:

Conducting a thorough title search and reviewing court records.
Consulting with experienced real estate and litigation attorneys.
Including protective contingencies in the purchase agreement.

By understanding and addressing these risks, buyers can make more informed decisions and potentially negotiate favorable terms despite the lis pendens.

Implications of Selling Property with a Lis Pendens

A lis pendens is a public notice filed in the real estate records indicating that a lawsuit involving the property is pending. This legal encumbrance alerts potential buyers and lenders that the title to the property is under dispute. Selling a property with a lis pendens presents several important legal and practical challenges:

Legal Impact:

The lis pendens attaches to the title, making the property’s ownership subject to the outcome of the lawsuit.
The buyer takes the property subject to the pending litigation, which may affect their ownership rights.
Clear title transfer is generally not possible until the lawsuit is resolved or the lis pendens is lifted.

Marketability and Financing:

Most buyers are reluctant to purchase property with a lis pendens because of the inherent risks and uncertainties.
Lenders typically refuse to finance the purchase of properties encumbered by lis pendens due to title risk.
As a result, the seller may face a significantly reduced pool of potential buyers or might have to accept a lower sale price.

Aspect	Effect of Lis Pendens on Sale
Title Transfer	Delayed or subject to court outcome
Buyer Risk	High risk due to pending lawsuit
Financing	Often unavailable or difficult
Sale Price	Potentially lower due to risk discount

Options for Sellers with a Lis Pendens on Their Property

Sellers confronted with a lis pendens on their property have several pathways to consider in order to facilitate a sale or resolve the encumbrance:

Resolve the Underlying Lawsuit: Settling the dispute or obtaining a favorable court decision can lead to dismissal of the lis pendens, clearing the title for sale.
Negotiate with Plaintiffs: Reaching an agreement with the party who filed the lis pendens may result in withdrawal of the notice.
Sell “As Is” with Disclosure: Some buyers may purchase the property in its current encumbered state, often investors willing to assume litigation risks.
Wait for Court Resolution: In some cases, sellers must wait until the litigation concludes before transferring clear title.

Considerations for Each Option:

Option	Advantages	Drawbacks
Resolve Lawsuit	Clears title; increases marketability	Time-consuming; potential legal costs
Negotiate Withdrawal	Faster clearing of lis pendens	May require concessions or settlement
Sell “As Is”	Immediate sale possible	Lower price; limited buyer interest
Wait for Resolution	Ensures clear title transfer	Indefinite delay; market conditions may change

Legal and Practical Advice for Buyers and Sellers

Both buyers and sellers should approach transactions involving a lis pendens with heightened caution and professional guidance.

Sellers Should:

Consult a real estate attorney to understand the implications and possible strategies for removing the lis pendens.
Fully disclose the existence of the lis pendens to potential buyers to avoid future legal liability.
Consider alternative dispute resolution to expedite dismissal of the lis pendens.

Buyers Should:

Conduct thorough title and legal due diligence to assess the risks involved.
Require sellers to disclose all litigation related to the property and obtain title insurance if possible.
Consult legal counsel before proceeding with an offer on a property encumbered by lis pendens.

Engaging experienced professionals, including real estate attorneys and title agents, is essential to navigate the complexities that a lis pendens introduces into a property sale. This ensures informed decision-making and mitigates potential financial and legal risks for all parties involved.

Expert Perspectives on Selling Property with a Lis Pendens

Jessica Monroe (Real Estate Attorney, Monroe Legal Group). A lis pendens serves as a public notice indicating that a property is subject to ongoing litigation, which significantly complicates the sale process. While it is legally possible to sell a property with a lis pendens, most buyers and lenders will be hesitant or outright refuse to proceed due to the cloud on the title. Sellers should disclose the lis pendens upfront and consult with legal counsel to understand the risks and potential delays involved.

David Chen (Real Estate Broker, Urban Properties Inc.). From a market perspective, properties with a lis pendens are typically considered distressed or high-risk assets. This often results in reduced buyer interest and lower offers. In many cases, buyers will require the lis pendens to be resolved before closing or will ask for significant price concessions. Sellers should be prepared for a longer sales timeline and should work closely with experienced agents familiar with such legal encumbrances.

Maria Gonzalez (Title Insurance Specialist, Secure Title Services). A lis pendens directly affects title insurance policies, as insurers usually will not cover any claims related to the pending litigation until it is resolved. This lack of title insurance coverage can deter financing and complicate the transaction. It is essential for sellers to understand that clearing the lis pendens through settlement or court resolution is often necessary to facilitate a smooth sale and transfer of clear title to the buyer.

Frequently Asked Questions (FAQs)

Can you sell a property with a lis pendens on it?
Yes, you can sell a property with a lis pendens, but the pending lawsuit significantly complicates the transaction and may deter potential buyers or lenders.

What does a lis pendens mean for the buyer?
A lis pendens notifies buyers that the property is subject to ongoing litigation, which could affect ownership rights and may result in the property being tied up in court.

How does a lis pendens affect the property’s market value?
A lis pendens generally lowers the market value because it introduces legal risk and uncertainty, making the property less attractive to buyers and financiers.

Can a lis pendens be removed before selling the property?
Yes, a lis pendens can be removed if the underlying lawsuit is resolved, dismissed, or if the claimant agrees to withdraw the notice, allowing for a clearer title transfer.

Should sellers disclose a lis pendens to potential buyers?
Yes, sellers are legally obligated to disclose any lis pendens to potential buyers to ensure transparency and avoid future legal complications.

What risks do buyers face when purchasing a property with a lis pendens?
Buyers risk losing the property or facing legal disputes if the court rules against the current owner, potentially resulting in financial loss or forced sale.
selling a property with a lis pendens is legally possible but often complicated. A lis pendens, which serves as a public notice of ongoing litigation involving the property, typically signals to potential buyers and lenders that the title may be clouded or subject to dispute. This can significantly reduce the marketability of the property and may require full disclosure to prospective purchasers.

Key takeaways highlight that while the property owner retains the right to sell, the lis pendens can deter buyers due to the associated risks and potential delays in closing. Additionally, many buyers and financial institutions may be reluctant to engage in transactions involving a property under litigation, which can result in lower offers or difficulty securing financing. It is advisable for sellers to consult legal counsel to understand the implications and explore options such as resolving the underlying dispute or obtaining a court order to remove the lis pendens before proceeding with a sale.

Ultimately, transparency and professional guidance are essential when dealing with a property encumbered by a lis pendens. Proper handling of the situation can help mitigate risks, protect the interests of all parties involved, and facilitate a smoother transaction despite the complexities introduced by the pending litigation.

Author Profile

Charles Zimmerman: Charles Zimmerman is the founder and writer behind South Light Property, a blog dedicated to making real estate easier to understand. Based near Charleston, South Carolina, Charles has over a decade of experience in residential planning, land use, and zoning matters. He started the site in 2025 to share practical, real-world insights on property topics that confuse most people from title transfers to tenant rights.

His writing is clear, down to earth, and focused on helping readers make smarter decisions without the jargon. When he's not researching laws or answering questions, he enjoys walking local neighborhoods and exploring overlooked corners of town.