Legal Question in Real Estate Law in California

Yes, because the trustee's right of sale pre-dates the lis pendens. It relates back to the date of the deed of trust. So the lis pendens is wiped out, just like a second deed of trust or a HELOC taken out after the first deed of trust. Just out of curiosity, how could the buyer not have known about the default and potential for a trustee's sale? Didn't the buyer get a preliminary title report as soon as the contract was signed and escrow opened? And why would the seller not disclose it and push for the sale to close and pay off the loan before foreclosure?

A lis pendens is a legal notice. Notices themselves are not "wiped out," they remain on the record, sort of like a reward poster for Joe Desperado remaining on the post office wall or nailed to a tree long after Joe has been arrested and acquitted (or hung). The lis pendens is "notice to the world" that a lawsuit affecting title or possession of the subject real propery is pending before a court, However, since the lien the trustee is foreclosing is almost certainly superior (in time of recording) to the rights, if any, of the plaintiff third-party purchaser in the litigation noticed by the lis pendens, the third-party purchaser's claims will be wiped out.'

Moreover, the object sought for damages, the real property, is no longer owned by the defendant in the lawsuit as it has been legally sold at the foreclosure sale. As the lis pendens effects the marketability of the real property which is now owned by an innocent purchaser for bona fide value, you may subject yourself to a lawsuit for slander of title, etc. if you do not remove the lis pendens.

I don't know whether the party asking this question is the same party who recorded the lis pendens or not, but it seems at least prospectively useful to point out that a lis pendens must be withdrawn by the attorney (or party) that recorded it in the first place, or their successor. No one else has the power to do so. An improper or expired lis pendens can be expunged by court order as well, but only the originator can withdraw it without court intervention.

The third party purchaser was on constructive notice if the deed of trust that was foreclosed was recorded. If the third party purchaser wanted notice of whether or not the property was in foreclosure, the third party should have recorded and served a request for notice of default.

Any suit by the third party disputing title after foreclosure is frivolous. The lis pendens can subject the third party to future liability.