Legal Question in Real Estate Law in California
Requirements for Lis Pendins
I am a Real Estate Broker who represents an out of state bank to sell their foreclosed property. A buyer entered into a contract to buy the property about 7 months ago. The property had title issues that had to be cleared up. This process took about 5 months. When the title was clear the buyer then had trouble closing stating he needed time to complete a 1031 exchange. He was given an extension which ran out within a couple of weeks. Meanwhile the bank recieved a higher offer than his original. The bank sent a letter of cancellation which he refused to sign. He is now threatening to file a Lis Pendins to keep the property from transferring. What can the seller do to stop the filing or dimiss the action and move with confidence with the new buyer?
6 Answers from Attorneys
Re: Requirements for Lis Pendins
have the transactions reviewed by an attorney who can give an opinion letter and then aggressively defend any suit by the would-be buyer.
Joel Selik
Attorney/Broker
760-479-1515
Re: Requirements for Lis Pendins
Nothing can be done unless and until the old buyer records a lis pendens. Once recorded, Seller can move the court to expunge (or remove) it from title. You can usually have a hearing on such a motion within 30 days. It would also be possible to expedite the hearing if you have good cause (i.e. days away from closing with a new buyer).
With the expungement motion, the court makes a preliminary determination as to whether or not the old seller will prevail on a specific performance lawsuit (one compelling the bank to sell to the old buyer). If the old buyer can't show a probable likelihood of prevailing on the merits, then the court will probably remove the lis pendens. Predicting the results of such a hearing depends on the facts and the terms of your contract.
If the bank is determined to sell to the new buyer, then keep your fingers crossed that no lis pendens is recorded (its one thing to threaten and another to act). If the old buyer files the lis pendens, then seen an attorney as soon as possible.
Re: Requirements for Lis Pendins
First, the buyer would need to hire an attorney and file a lawsuit before filing the lis pendens. Then the bank's attorney can move to have the lis pendnes expunged, and might even be able to collect attorney fees.
If the contract does not give the old buyer some sort of automatic extension, he will probably lose.
Re: Requirements for Lis Pendins
Mr. Schomer is exactly right.
Re: Requirements for Lis Pendins
You may not be able to stop the filing of the lawsuit, but we may be able to do a motion to expunge the lis pendens, if we have a right to do so. Please contact my office at 714 363 0220 to set up an appointment. I would like to review your written documentation including any letters, notices, and lawsuits. We handle cases throughout California. We can review your documentation by fax and speak with you by phone.
Many ways to skin a cat
I need to see the documents and you need to see my resume. Contact me.
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