A Lis Pendens is a formal notice recorded in the County Recorder’s Office for the County in which the subject property is located. Its purpose is to give public notice that a lawsuit is pending that could affect legal title to the property. It is not a lien, but it puts prospective buyers, lenders, and other interested parties on notice that any potential interest in the property is subject to the outcome of the lawsuit. The notice is intended to protect the plaintiff’s claim to the property and prevent the property from being sold or encumbered in a way that would diminish the plaintiff’s rights should the plaintiff win its lawsuit.

A recent Court of Appeals case, Westbrook Rental, LLC v. Goodman, gave instruction for the use of a Lis Pendens. It noted that a Lis Pendens can be recorded only when a lawsuit affects title to real property. To affect title to real property, the owner of the real property must be joined in the lawsuit.

In the Westbrook case, a husband recorded a Lis Pendens on property owned by his wife’s LLC. But he did not join the LLC in his dissolution action. As a result, the Lis Pendens was determined to be a groundless recording, and the LLC was entitled to its damages and attorney fees.

Recording any document that is groundless and/or wrongfully clouds the title of another’s property is a violation of Arizona law. ARS 33-420 provides penalties for such a recording in the minimum of $5000.00 or treble the actual damages, whichever is greater, plus attorney fees and costs. The statute also provides a special action procedure to remove the cloud on title.

If you have questions concerning a real estate matter or other legal matter, call one of our experienced attorneys at 602-277-4441 or use the form below to schedule a free consultation.