Legal Question in Civil Litigation in California
Can a realtor continueto show a property when the property has a lis pendins on the property?
4 Answers from Attorneys
Of course. A Notice of Pendency of Action (the proper term in California for a lis pendens) is nothing more than legally binding notice to the world that there is litigation pending in which some right, title or interest in the property is in dispute. This prevents the property from being sold to a good faith purchaser without notice of the adverse claim against the seller's interest in the property. That is important because a good faith purchaser without notice would get the property free and clear of the adverse claim. With a Notice of Pendency of Action recorded in the chain of title, any purchaser is imputed knowledge of all the claims in the lawsuit, regardless of what they may or may not know in fact.
So there is nothing that prevents a buyer from taking the property subject to the claims, or to contract to buy the property subject to the Notice of Pendency of Action being dismissed or withdrawn. In some cases, such as mechanics lien cases, the seller can also substitute a bond for the lien and remove the NPA to sell the property. You might, though not likeley, even find a situation in which a title company would insure around a NPA that is so defective on its face that the underwriter concludes it is not valid. So bottom line: there are many reasons to continue marketing a property that is subject to a NPA, and there is certainly nothing illeal about a broker listing and showing it.
Yes, though if she knows of the lis pendens she must disclose it. She also may have a duty to find out about the lis pendens, but it's possible that the notice hadn't been filed yet when she checked.
A lis pendens does not even prevent the property from being sold, much less from being marketed. All it does is notify potential buyers that someone else claims an ownership interest in the property, that the claim is being litigated, and that the claimant's rights would take priority over the buyer's.
Some potential buyers might be willing to wait for the litigation to end before making an offer. There is no reason to forbid realtors from showing them the property in the meantime. Other potential buyers might make offers that are conditioned on the lis pendens being withdrawn or removed; they too should be able to have a realtor show them the house.
Few people would be willing to buy a property with a lis pendens on it, but those who are willing to risk losing their investment are free to take that chance. Realtors are allowed to show the house to them as well.
?? Of course. A lis pendens is nothing more than a notice of claim against the owner or property that would have to be paid or resolved before title could be transferred at close of escrow. No big deal, and of no real interest to the buyer, since it is the seller who has to settle or pay off the lien from his proceeds. He can bond around it if need be.
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