A lis pendens is a valuable tool to protect property rights when a dispute arises about property ownership. Literally meaning “suit pending,” a lis pendens is public notice that a lawsuit relating to the ownership of a particular piece of property has been initiated. In Pennsylvania, a lis pendens may be both filed with the court and recorded in the office of the recorder of deeds of the county where the property is located. The filing and recording may occur simultaneously with the initiation of a lawsuit, so long as the outcome of the litigation will affect title to the property.
A party initiating an action that involves competing claims to property does not even need to file a complaint before filing and recording a lis pendens. Instead, in Pennsylvania, a party may initiate an action by filing a writ of summons (which allows a party to quickly initiate an action and file a complaint at a later time). The filing of the writ of summons allows the party to also file and record a lis pendens so that third parties are placed on notice that any interest they may acquire in the property is subject to the outcome of the litigation.
Disputes that may benefit from the filing and recording of a lis pendens often arise during the purchase and sale process. For instance, a purchaser may repudiate an agreement of sale and attempt to sell the property to a third party, rather than the buyer under the agreement. In such a situation, the buyer could initiate an action for specific performance against the seller. To more fully protect the buyer’s right to purchase the property, the buyer could simultaneously file and record a lis pendens.
In addition to disputes under purchase and sale agreements, litigation that may benefit from the filing and recording of a lis pendens can also arise when two people do not have a contractual relationship, but they both claim ownership of the same property. This situation might arise when two people were separately deeded the same property, or when there is a dispute over the exact property granted in a deed. One of the people claiming ownership of the property may file an action to quiet title to the property, and that person could also file and record a lis pendens to protect its claimed interest in the property.
Once a lis pendens is filed and recorded, any person who purchases the property does so at his own risk, subject to divesture upon resolution of the litigation. In this way, a lis pendens protects claimed property interests until the court can resolve the dispute.
Because a lis pendens restricts the free transfer of property by making it unattractive to potential third party purchasers, the defendant in litigation may wish to have a lis pendens stricken from the records. If stricken, the parties may more freely transfer their claimed interests in the property, because third parties who do not have actual knowledge about the competing ownership may acquire an interest in the property that will not be subject to the outcome of the pending litigation. Requests to strike lis pendens are thus significant for the parties to the litigation, because the maintenance or striking of a lis pendens can affect the parties’ rights to the property.
The Pennsylvania Superior Court recently enhanced the protection that a lis pendens provides by ruling that an order striking a lis pendens is immediately appealable, even if the court has not yet ruled on the underlying property dispute. In Barak v. Karolizki, 196 A.3d 208 (Pa. Super. 2018), an alleged owner of property filed a complaint against two other people who claimed to own the property, seeking to establish title. To protect his interest in the property during litigation, he filed a lis pendens. The defendants found a buyer for the property and asked the trial court to strike the lis pendens so that they could freely sell it without the plaintiff’s claims. The trial court granted the request to strike the lis pendens, concluding that the plaintiff could be protected by ordering the buyer to deposit the purchase price into escrow with the court. The plaintiff appealed the order, and the Superior Court ordered the parties to address whether the order was an interlocutory order that was not immediately appealable.
The Superior Court concluded that an order striking a lis pendens is a final order because it effectively puts plaintiffs “out of court” with respect to their claim that they have full and complete ownership of the property; without the ability to maintain a lis pendens, plaintiffs cannot fully protect their claimed ownership interest. The Superior Court also concluded that an order striking a lis pendens is a collateral order because (1) it is separable from the main cause of action in the case (i.e., the claim for specific performance or to quiet title) because the analysis involved in determining whether to strike a lis pendens does not adjudicate ownership but looks only to whether the underlying claims involve a title dispute and if the interests of justice weigh in favor of maintaining the lis pendens, (2) the right involved is too important to be denied review because the ability to maintain a lis pendens protects the public interest by preventing potential buyers from “unintentionally purchasing a lawsuit along with a piece of land,” and (3) the claim would be irreparably lost without immediate appellate review because, once a lis pendens is removed from the judgment index, the record owners could sell the property to an unwitting third party, who would not necessarily be on notice of the pending lawsuit.
The holding of Barak v. Karolizki clarifies that lawyers involved in title dispute litigation in Pennsylvania should advise their clients to immediately appeal orders striking lis pendens, if their clients were the parties who filed the lis pendens to protect their interests. Also, lawyers whose clients were the parties who requested the striking of the lis pendens should be alert to any attempt by the opposing party to appeal an order striking a lis pendens out of time and should request the court to quash the appeal as untimely. Because the Superior Court concluded that orders striking lis pendens are final or collateral, parties in Pennsylvania will need to appeal those orders within 30 days or risk losing their opportunity to challenge those orders. Pennsylvania’s laws thus enable lawyers litigating title disputes to quickly resolve for their clients the propriety of maintaining the restrictions on property that lis pendens impose, by seeking immediate appellate review.