LIS PENDENS (“A SUIT PENDING”) AND THE PERILS OF NOT MEETING THE “REAL PROPERTY CLAIM” REQUIREMENT
A notice of pendency of action or lis pendens is a statutory procedure designed to give constructive notice of a lawsuit affecting real property. (Civ. Pro. C. § 405.2 et seq.) The recording of this notice is privileged if properly recorded. However, no privilege exists if the notice is improper such as when the action does not affect title or possession of real property or because the action is filed in the wrong court.
Pursuant to Code of Civil Procedure § 405.2, a lis pendens is available in actions “in which a real property claim is alleged.” Section 405.4 then defines the phrase “real property claim” as “…the cause or causes of action in a pleading which would, if meritorious, affect (a) title to, or the right to possession of, specific real property or (b) the use of an easement identified in the pleading, other than an easement obtained pursuant to statute by any regulated public utility.”
Examples of valid real property claims include actions for: quiet title, partition, specific performance, rescission of a contract for the purchase of real property, etc., some of which mandate the recording of a lis pendens while others make it optional.
Despite the above definitions, it is sometimes difficult to ascertain what actions involve a “real property claim.” For instance, in Campbell v. Superior Court (2005) 132 Cal.App.4th 904, the court held that a request for imposition of an equitable lien was not a real property claim sufficient to support recording of a lis pendens because the trustee plaintiff failed to adequately plead a right to the equitable remedy of constructive trust absent a claim of ownership in the real property. In other words, a lis pendens is not proper if the only goal is to obtain security for the recovery of money. But, on the other hand, when the goal is to recover title to real property due to a fraudulent conveyance, for instance, then the remedy of a constructive trust does support the recording of a lis pendens. (Hunting World, Inc. v. Superior Court (1994) 22 Cal.App.4th 67, 72–74.) Similarly, a creditor of a limited partner cannot record a lis pendens against the partnership property. (North Coast Business Park v. Superior Court (1984) 158 Cal.App.3d 858, 860 – “[a]n interest in a partnership is personal property … [and [j]ust as partnership property is not available to satisfy a judgment against a limited partner in his individual capacity  individual limited partners do not have an interest in the partnership’s real property, neither title to the property nor a right of possession, that can support the filing of a lis pendens.”)
If a lis pendens is recorded improperly, the defendant may move to expunge the notice (Civ. Proc. C. § 405.30), and request recovery of all of its attorneys’ fees and costs, which are mandated under Code of Civil Procedure § 405.38. Additionally, an improperly recorded lis pendens could support a claim for slander of title and/or even interference with prospective economic advantage arising, for instance, out of the property owner’s inability to perform under a contract for the sale of the property due to the lis pendens clouding title. The recording of a lis pendens offers many protections to the party seeking title or interest in real property. However, because the consequences of filing an improper lis pendens are serious, prior to filing the action that will support the recording of a lis pendens, the pleader and its counsel should spend a bit of time identifying the “real property” claim.
Author’s bio: Marie E. Wood, Esq. is a shareholder at Reid & Hellyer, APC where she practices business and real estate litigation as well as immigration law.