This question is for Sean OToole in particular since he seems to be the most knowledgeable on this subject. Others feel free to chime in.
I am considering bidding on a property that has a lis pendens on the title. I researched the lis pendens document and it states the lis pendens is to establish an easement/water access and was filed by the current owner of the property against the property trustee which is a different person than the current owner.
Is this a property worth bidding on? How long will it take to get this lis lendens removed from the title and how much money should I expect to pay in legal fees to do so?
Hi AJ, I can’t really make sense of this. I can’t imagine why an owner would file a notice of pending litigation against their own property to establish an easement. And what is a “property trustee” in this case? There can be a trustee under a deed of trust (mortgage), or a trustee of a trust that owns the property, but neither of those makes sense given the information you provided.
As for resolving a lis pendens after a foreclosure sale, it really comes down to the circumstances and how the parties will proceed. If a neighbor was suing for an easement, I’d expect to either have to grant them the easement, or to have to fight it. If the owner is suing for an easement I’d imagine that might be pretty easy to get dismissed once they no longer have an ownership interest in the property. But there simply isn’t enough information above for me to have a strong opinion.
Thank you for the response. Its a very strange case indeed. It doesn’t make much sense to me either and I actually read through all the court documents.
I also have a property with Lis Pendens. Do I need to worry about the Lis Pendens below? Is there any more detailed information I should know for this Lis Pendens? Where can I find it?
If I win the house, can I move in? I really like the house and have to move in and use it as my primary residence. Thanks!
I’ve seen people get burned by stuff like this - sometimes it’s quick to clear, sometimes it’s a headache - so if you really want the place, get a lawyer to eyeball it first.
A lis pendens is a notice of pending litigation. In this case, it appears it might be against the bank trying to foreclose. This usually means one of two things:
They’ve got a legitimate claim against the bank. In this case if you buy the house at foreclosure and the owner wins their case, the bank will give you your money back. In my experience, this is at best 1 of 10 cases.
They are grasping at straws or have bought into any one of dozens of conspiracy theories or scams that have left them to believe that filing a lis pendens or suing the bank will save them from foreclosure. The typical case. In this case, if you buy the house at foreclosure, you will likely end up with it… eventually.
The question comes down to how long it will take. Assume anyone who takes this step will also fight the eviction. Perhaps misuse the bankruptcy courts. Etc. So you should go in expecting a long, drawn out process, and having to spend a reasonable amount on attorneys. Might still be worth it, but just be sure to bake in that extra time and money into your bid.
And homeowners, know you are only hurting yourselves with all this. You get the excess proceeds from the sale - or they go to help pay off your debts. So the higher the bid the better. And way better than using your time and money on things that won’t save your home in any event.
Hi Sean,
Thank you very much for the reply.
The house has been foreclosed in court, but it is waiting for 45 days SB1079 foreclosure.
We are VERY interested in this house because of the schools. We want to win the house in the post foreclosure bid. Per SB1079, we have to move in in 60 days. Can we evict the owner if there is a lis pendens?
Thanks!
A lis pendens is a notice of pending litigation. In this case, it appears it might be against the bank trying to foreclose. This usually means one of two things:
They’ve got a legitimate claim against the bank. In this case if you buy the house at foreclosure and the owner wins their case, the bank will give you your money back. In my experience, this is at best 1 of 10 cases.
They are grasping at straws or have bought into any one of dozens of conspiracy theories or scams that have left them to believe that filing a lis pendens or suing the bank will save them from foreclosure. The typical case. In this case, if you buy the house at foreclosure, you will likely end up with it… eventually.
The question comes down to how long it will take. Assume anyone who takes this step will also fight the eviction. Perhaps misuse the bankruptcy courts. Etc. So you should go in expecting a long, drawn out process, and having to spend a reasonable amount on attorneys. Might still be worth it, but just be sure to bake in that extra time and money into your bid.
And homeowners, know you are only hurting yourselves with all this. You get the excess proceeds from the sale - or they go to help pay off your debts. So the higher the bid the better. And way better than using your time and money on things that won’t save your home in any event.
You can start an eviction, but its impossible to say whether or not it will be successful. It comes back to my two points above. If they have a valid case, there is a pretty good chance the judge handling the eviction (unlawful detainer), will put your case on hold until theirs is resolved. Even if they don’t have a valid case, the judge may still but the eviction on hold, unless you can demonstrate that their case is only a delay tactic and invalid. For example, they filed a lis pendens (notice of pending litigation), but never filed a case. Bottom line, it will likely take time and money, even if they never file or lose their case. If they win, the bank should return your money, but you will be out time, legal fees, and interest. Those kinds of risks and trade-offs are the norm when buying at trustee sale auctions, or even in these stupid new SB1079 post-sale processes.
Hi Sean,
Sorry I have more questions:
How can I find if they have a valid case and if they have filed a case?
They also filed a temporary restrain order to stop recordation of Trustee’s Deed upon sale. This TRO is going to expire on 5/7. If they keep filing this, the new owner can’t record the deed and can’t evict them. How to deal with this? Thanks!
You can start an eviction, but its impossible to say whether or not it will be successful. It comes back to my two points above. If they have a valid case, there is a pretty good chance the judge handling the eviction (unlawful detainer), will put your case on hold until theirs is resolved. Even if they don’t have a valid case, the judge may still but the eviction on hold, unless you can demonstrate that their case is only a delay tactic and invalid. For example, they filed a lis pendens (notice of pending litigation), but ne
ver filed a case. Bottom line, it will likely take time and money, even if they never file or lose their case. If they win, the bank should return your money, but you will be out time, legal fees, and interest. Those kinds of risks and trade-offs are the norm when buying at trustee sale auctions, or even in these stupid new SB1079 post-sale processes.
You can’t - you are neither judge nor jury. You can guess, and to that end, there is a pretty good clue in the TRO - “the Court finds a low likelihood of success on the merits of the asserted claims”
Same as I’ve said twice now. If they have a valid case and win, the trustee’s sale will be rescinded, and you will get your money back from the trustee. If they lose their case, you’ll be able to record the deed and evict them. That could take days, months, or possibly (though unlikely) years. I had someone fight a foreclosure for over a year until I finally got them out. Fortunately, the market was rising quite quickly, so in the end, they did me a huge favor.
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