Legal Definitions - Notice of Pendency

A Notice of Pendency is a formal legal document filed in a public record to alert interested parties that a lawsuit concerning a specific piece of property is ongoing. It serves as a warning that the property's title or ownership is currently in dispute and could be affected by the outcome of the legal proceedings.

When a Notice of Pendency is filed, it becomes part of the property's public record, typically alongside its deed at the county registry. This action effectively "clouds" the property's title, making it very difficult, if not impossible, for the owner to sell, mortgage, or transfer the property until the lawsuit is resolved. The primary purpose is to ensure that if the court ultimately rules against the property owner, the property itself remains available to satisfy any judgment or court order, regardless of any attempts to sell or transfer it during the litigation.

Here are some scenarios illustrating how a Notice of Pendency might be used:

• Dispute Over a Real Estate Purchase Agreement: Imagine a situation where a potential buyer signs a contract to purchase a house, but the seller later changes their mind and refuses to close the deal. The buyer believes they have a valid contract and sues the seller to force the sale (a legal action known as "specific performance").

  How it illustrates the term: To prevent the seller from selling the house to another buyer while the lawsuit is pending, the original buyer would file a Notice of Pendency on that specific property. This filing would alert any new potential buyers or lenders that the property's ownership is contested, making it unlikely for the seller to find another buyer or secure a new mortgage until the court decides who has the right to the property.

• Divorce Proceedings Involving Marital Property: Consider a divorcing couple whose primary asset is their shared family home. One spouse is concerned that the other spouse might try to sell the home, take out a large loan against it, or otherwise diminish its value before the court can equitably divide their marital assets.

  How it illustrates the term: The concerned spouse could file a Notice of Pendency on the family home. This legal notice would prevent the other spouse from unilaterally selling or mortgaging the property, ensuring that the home remains an available asset for the court to consider and distribute fairly as part of the divorce settlement.

• Contractor's Lien Enforcement: A construction company completes a major renovation project on a commercial building, but the property owner disputes the final bill and refuses to pay. The construction company files a lawsuit to recover the unpaid amount and enforce a mechanic's lien (a legal claim against the property for unpaid work).

  How it illustrates the term: The construction company would file a Notice of Pendency on the commercial building. This action would inform any potential buyers or lenders that the property is subject to an ongoing lawsuit and a claim for payment. This makes it difficult for the owner to sell or refinance the building, thereby preserving the property as a potential source to satisfy the construction company's judgment if they win the lawsuit.