If you’re in the process of selling your home, you may have heard the term “Certificate of Lis Pendens.” This phrase can create problems for sellers because it can scare away potential buyers. But what does it mean for you and your sale?

A Certificate of Lis Pendens, also known as CLP, is a registration on title that alerts the public that there is some legal action pending involving the property. If you encounter this notice, you’ll want to understand what it means before putting an offer in on a house.

If you need advice regarding a Lis Pendens, reach out to us today. Our real estate litigation lawyers are here to help you.

Lis Pendens in Alberta

“Lis Pendens” originates from Latin and means “pending suit.” A Lis Pendens Certificate in Alberta is an official document that is filed by a party involved in a legal dispute related to real property and registered at the Alberta Land Titles Office. This document notifies the public that there is some sort of action pending, such as pending real estate litigation or other legal proceedings.

However, the CLP document does not confirm that the claim will be successful and many claims secured by the registration of a Certificate of Lis Pendens fail. Still, a CLP essentially serves as a warning to prospective buyers that they should be aware of the potential risks or pending litigation associated with the property before making any decisions.

In Alberta, any individual or company can file a Lis Pendens. This includes anyone who has an interest in or claims against the real estate, including a separating spouse, lenders, and other creditors. The filing must be made at the court where the action is being brought.

When a Lis Pendens is filed, it becomes part of the public records, which means it can be accessed by anyone searching for information about the property title and history. This document can be used as proof that there are potential legal issues at hand, which could make it difficult for potential buyers to proceed with their purchase without further investigation into the matter. It also creates uncertainty surrounding ownership and can lead to more time-consuming negotiations between parties involved in the dispute.

For sellers, this document can make it more difficult to close on their sale in a timely manner since prospective buyers may become concerned about investing in something with attached risks. To protect themselves during this process, property owners should consult with an experienced real estate lawyer who can offer advice on how to best navigate this complicated situation and reach an agreeable resolution with all parties involved.

Examples of Lis Pendens Notice

Examples of Lis Pendens include disputes over ownership of the property, title defects, boundary and easement issues, unpaid builder contracts, matrimonial disputes or taxes, fraudulent documentation filings, and other matters that could affect the property rights of a buyer. When used correctly, they can be a powerful tool in protecting the plaintiff’s interest in the property.

One common example of a CLP is when a homeowner has fallen far behind on their mortgage payments and the lender files a Lis Pendens notice to alert others that they intend to initiate foreclosure proceedings. This document prevents any further transfers of real estate property until the dispute can be resolved and can also provide leverage for lenders to pursue a loan modification or other agreement with the borrower.

Another example is when someone claims an adverse interest in real estate that was previously unknown. For instance, if an heir to an estate discovers that their predecessor had ownership rights but never transferred them, they may file a Lis Pendens as part of their effort to recover those rights. In these cases, it’s important for buyers to conduct research into past ownerships prior to making an offer on a property.

In some cases, a court will order one party to file a Lis Pendens note in order to protect their interests during the legal process. This usually occurs when there are questions regarding title or ownership and could lead to further complications if not addressed before closing a home sale. For example, this could be the case during divorce proceedings if one spouse claims rights to the matrimonial house. If they do not sign a Dower Release or settle the matrimonial property disputes, this claim must be resolved before a buyer can become the new property owner.

Finally, if one party fails to comply with court orders or other legal requirements related to the property dispute, they may need to file a Certificate of Lis Pendens as evidence of their non-compliance. This serves as a warning that there is an unresolved matter involving the real estate which must be resolved before any transfer of ownership can proceed.

Should You Buy a House with a Lis Pendens?

There is no simple answer when it comes to deciding whether or not to buy a house with Lis Pendens. On the one hand, if you are confident that the dispute will be resolved in the seller’s favour prior to your closing, the property could be a great investment. On the other hand, there is always the risk that the pending lawsuit could drag on for an extended period or, even worse, that the seller could lose out in the dispute.

For buyers, it’s important to weigh all the potential risks and benefits involved before making a decision. If you are okay with taking on those risks and believe that the potential savings are worth it, then go ahead and make an offer. Just be sure to have a real estate lawyer review any contracts prior to signing them, and keep in mind that there may be delays in closing while the dispute is ongoing.

On the other hand, if you are a first-time home buyer or you are not comfortable with uncertainly surrounding title or ownership, then it may be best to steer clear of properties with a Lis Pendens. In these cases, it’s usually safer to wait until the issue has been resolved before making any offers on real estate – even if that means paying more for a property further down the line.

Lawyers and Lis Pendens

Lawyers play an essential role in the process of dealing with Lis Pendens. For instance, it is recommended that buyers and sellers consult with a qualified attorney prior to signing any contracts or agreements related to the property dispute. An experienced real estate lawyer can help explain the potential risks involved with purchasing a home under a Lis Pendens, as well as provide detailed advice on how to adequately protect their interests throughout the process.

Additionally, an attorney can be crucial in helping parties reach agreements outside of court. If negotiations have stalled and the dispute has been filed with a Lis Pendens, an experienced lawyer may be able to bridge the gap between both sides and help them come to an amicable resolution. This can save time and money for all parties involved while also avoiding lengthy and costly legal proceedings.

Another way that lawyers are beneficial when dealing with Lis Pendens is by making sure that all paperwork is filled out correctly and timely filed with the court system. They can help ensure that all relevant documents are obtained and filed properly so that any potential disputes or issues surrounding the property’s title or ownership are addressed quickly and efficiently. Filing deadlines are often strict in these types of situations, so having an attorney who understands this process can make a huge difference in getting things done right the first time around.

Overall, attorneys who specialise in real estate law can provide invaluable assistance for anyone dealing with a Lis Pendens situation. By understanding the complexities associated with these cases and providing knowledgeable guidance throughout the process, these legal professionals can make sure that everyone involved is protected throughout this challenging situation.

At DLegal, we know local real estate law and the complexities around Lis Pendens. We will be happy to share our expertise with you. If you are involved in a situation with a Certificate of Lis Pendens, reach out today, and we will help you come to a satisfactory resolution.