Are Lis Pendens liens wiped out after California Property Tax Auction Sale? I know the major Lien i have to worry about is the IRS lien. How about lawsuit liens put on by county or state government.
From a customer…
The issue is with obtaining title insurance. A title company will not issue title insurance if there is a lis pendens. The lis pendens is not really a lien but a notice of an action. It is a place card set on title to notify the public that there is a litigation relating to the subject property. Similar to a mechanics lien notice. The notice is not a lien until the final court action grants a judgment. Its just notice, which puts a cloud on the title until resolved.
If the case was dismissed and you can show the title company that the case was dismissed yet they forgot or did not remove the lis pendens then you may, or may not, get lucky enough to get the title company to insure around the lis pendens. I have had it go both ways. Recently we had a deal where we could not locate the plaintiff or their attorney to have them sign a release for us to record. We instead obtained a certified copy of the court dismissal and recorded it and then the title company insured around the issue.
Then we’ve had cases where we had to obtain a release ourselves as the title company would not insure around the cloud and we could not locate the plaintiff and they fired their attorney. We had to get a judge to order the release.
If the lis pendens is on the property and the case is active then you need to file an action with the court to have the lis pendens released from the property. We’ve always had them granted as usually the issue was relating to something outside of the foreclosed DOT. Even if its related to the foreclosed DOT it is a pain but as a bonafide purchaser I have always been successful in getting them released.
Bottom line, the lis pendens is not removed, it stays as a cloud on title pending the court case and can be quite a bit or work to clean up.