Lis Pendens
A recorded notice that litigation is pending concerning specific real property, providing constructive notice to subsequent purchasers and lenders of the dispute. Permitted only in actions involving title to property, establishment of an interest in property, or enforcement of a lien on property. Subject to expungement on motion if the underlying claim lacks evidentiary support.
A lis pendens (Latin: "litigation pending") is a recorded notice that litigation is pending concerning specific real property. Once recorded with the county clerk, it provides constructive notice to subsequent purchasers, lenders, and other parties dealing with the property. The practical effect is to "cloud" title until the underlying litigation is resolved, buyers and lenders typically refuse to close on property subject to a pending lis pendens, since they would take subject to whatever judgment ultimately issues.
When a lis pendens may be filed
Section 12.007 limits lis pendens filings to three categories of actions: (1) actions involving title to real property; (2) actions to establish an interest in real property; and (3) actions to enforce an encumbrance against real property. A lis pendens filed in connection with an action that does not fall within these categories, for example, a pure money-damages contract dispute that incidentally references a property, is improper and subject to expungement.
Required content and recording
The lis pendens must include: (1) a statement that an action is pending; (2) the style of the action and the court in which it is filed; (3) the cause number; (4) the names of all parties; (5) a description of the property affected; and (6) the kind of action with the relief sought. The notice is recorded with the county clerk in the county where the property is located. There is no filing fee at the courthouse for recording, though minimal recording costs apply at the county clerk.
Cancellation and expungement
Section 12.0071, added by the Legislature to address abusive lis pendens filings, allows a property owner to file a motion to expunge the notice on grounds that (a) the underlying pleading does not contain a real property claim of the type permitted under § 12.007; or (b) the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim. If the court grants the motion, the lis pendens is canceled and the cancellation is recorded.
Effect on transactions
A pending lis pendens generally precludes commercially financeable real estate transactions, title insurers will not issue policies without exception, and lenders will not fund loans subject to the unknown outcome of litigation. As a practical matter, the lis pendens functions as injunctive relief without the procedural protections of an injunction. This makes the expungement remedy under § 12.0071 critically important when the underlying claim is weak or improperly framed.
Improper filing risks
Filing an improper lis pendens, particularly one that does not fall within § 12.007's enumerated categories, exposes the filer to claims for slander of title, tortious interference, malicious prosecution, and attorney's fees on expungement. Texas courts have awarded substantial damages where lis pendens were filed strategically to interfere with closing of unrelated transactions.
For Texas commercial real estate buyers and sellers, a lis pendens discovered during title commitment review is one of the most common pre-closing crises. The buyer's first response should be (1) understand the underlying action and assess its merit; (2) determine whether the action falls within § 12.007 categories; (3) if not, consider expungement motion; (4) if so, evaluate negotiating around the issue (escrow, indemnity, postponement) or terminating the contract. Sellers facing a lis pendens should consider proactive expungement filing if the underlying claim is weak.