Notice of Lis Pendens in Texas

What Is a Notice of Lis Pendens?

Background

“A lis pendens is a ‘notice, recorded in the chain of title to real property...to warn all persons that certain property is the subject matter of litigation.’” (Countrywide v. Howard (2007) 240 S.W.3d 1, 4 citing Black's Law Dictionary 942-43 [7th ed.1999].) The purposes of a notice of lis pendens are to put those interested in a particular tract of land on inquiry about the facts and issues involved in the suit and to put prospective buyers on notice that they acquire any interest subject to the outcome of the pending litigation. (Gene Hill Equip. Co. v. Merryman (1989) 771 S.W.2d 207, 209.)

Lis pendens can be a powerful tool that can provide significant protection and leverage to the party seeking to establish an interest in a specific parcel of real estate. A lis pendens timely and properly filed can effectively halt very large real estate sales involving millions of dollars pending the outcome of litigation. (Countrywide, supra, 240 S.W.3d at 4 citing Gary Powell, Real Estate Remedies: Lis Pendens (2005) 32 Tex. St. Bar Sec. Litig. Rep. 70, 70.)

“[N]otice of lis pendens” in sub section 12.0071(f) is not expressly limited to a written, recorded document. (Sommers v. Sandcastle Homes, Inc. (2017) 521 S.W.3d 749, 763.) “Lis pendens” literally means “a pending lawsuit” and retains that meaning in modern legal parlance. (Id.) Black's Law Dictionary not only notes, in its etymology of “lis pendens,” that the term is Latin for “a pending lawsuit,” but unremarkably states as its first definition that the term means “[a] pending lawsuit.” So a notice of lis pendens need not always be a legal term of art. It can simply mean notice of pending litigation. (Id.)

“[T]he effect of a recorded and statutorily compliant notice of lis pendens is that all would-be purchasers are put on constructive notice that the filer has brought a suit claiming an interest in the property, thus precluding the would-be purchaser from acquiring innocent-purchaser status.” (Sommers, supra, 521 S.W.3d at 763-64.)

How to Structure the Notice

A notice of lis pendens may be filed during the pendency of an action involving:

title to real property,
the establishment of an interest in real property, or
the enforcement of an encumbrance against real property.

(Countrywide, supra, at 4 quoting Tex. Prop. Code Ann. § 12.007(a).)

“An instrument that is properly recorded in the proper county is ... notice to all persons of the existence of the instrument. . . .” (Id. § 13.002(1).) However, a document filed for record without statutory authorization does not impart constructive notice to third parties. (See Burnham v. Chandler (1855) 15 Tex. 441, 443 [“[A]s the registration law does not require or authorize the instrument of assignment referred to in this case to be recorded, the record would not be notice of the existence of such instrument.”]; Tandy v. Dickinson (1963) 371 S.W.2d 81, 82-83 [“[T]he fact that Defendants' Exhibit I had been filed of record did not constitute constructive notice to appellee and his predecessor in title because it . . . was not such an instrument as to authorize it to be recorded.”]; see also, City of Abilene v. Fryar (1940) 143 S.W.2d 654, 659 [“[A]n instrument filed or recorded in violation of an express statutory prohibition would not constitute constructive notice.”])

To satisfy section 12.007, the suit on which the lis pendens is based must claim a direct interest in real property rather than a collateral interest. (In re Collins (2005) 172 S.W.3d 287, 293.) In other words, the property against which the lis pendens is filed must be the subject matter of the underlying lawsuit. If the suit seeks a property interest only to secure the recovery of damages or other relief that the plaintiff may be awarded, the interest is merely collateral and will not support a lis pendens. (Flores v. Haberman (1995) 915 S.W.2d 477, 478.)

The Court’s Decision

A writ of mandamus is the appropriate remedy when an issue arises concerning the propriety of a Notice of Lis Pendens. (See Flores v. Haberman (1995) 915 S.W.2d 477, 478 [holding that interest asserted by parties did not involve one articulated in § 12.007(a), thus trial court erred in not cancelling the notice of lis pendens.])

It is proper to file a lis pendens when the litigation involves the establishment of an interest in real property. (In re Jamail (2004) 156 S.W.3d 104, 107 citing Tex. Prop. Code Ann. § 12.007(a).) However, only a party to the action who is seeking affirmative relief may file a lis pendens. (Id.) If only collateral questions are involved which might ultimately affect the interest of the parties to property, lis pendens is not available. (Id.) Where lis pendens is improper and the trial court has refused to cancel it, mandamus may lie to obtain relief. (Flores v. Haberman (1995) 915 S.W.2d 477, 478; Helmsley-Spear of Tex., Inc. v. Blanton (1985) 699 S.W.2d 643, 645.)