When legal disputes arise concerning real estate, property owners often find themselves in a challenging position. Filing a Lis Pendens is a legal step that can protect your interests during such disputes in Colorado. In this article, we will explore what a Lis Pendens is, when and how to file one, and its implications for property owners.
Understanding Lis Pendens
The term “Lis Pendens” is Latin for “suit pending.” Essentially, it is a notice filed in the public records, indicating that a legal action is in progress that affects the title to a specific property. The purpose of a Lis Pendens is to alert potential buyers, lenders, or other interested parties that a property is subject to a legal dispute. It puts a cloud on the property’s title, making it challenging to sell or transfer until the dispute is resolved.
When Should You Consider Filing a Lis Pendens in Colorado?
You might consider filing a Lis Pendens in Colorado under the following circumstances:
- Property Disputes: When you are involved in a property dispute such as boundary disputes, easement disputes, or ownership claims.
- Foreclosure Defense: If you are facing foreclosure and believe that the foreclosure is unjust, filing a Lis Pendens can delay the foreclosure process.
- Contract Disputes: In cases where there is a dispute over the terms of a real estate contract, filing a Lis Pendens can signal your intent to enforce your rights.
- Non-Payment of Debt: If someone owes you money related to the property, and they have not paid as agreed, filing a Lis Pendens can help protect your claim and interest in the property.
- Divorce or Inheritance Disputes: In cases of divorce or inheritance, when there is a dispute over the property’s ownership or division, a Lis Pendens can be used to establish your interest in the property.
- Construction or Improvement Liens: If you are a contractor, subcontractor, or supplier who has not been paid for work or materials provided to improve a property, a Lis Pendens can secure your lien rights.
- Enforcing Court Orders: When a court has issued an order related to a property dispute, and the other party refuses to comply, filing a Lis Pendens can help enforce the court’s decision.
- Preventing Unlawful Transfers: Filing a Lis Pendens can prevent property owners from transferring the property to third parties during the course of a legal dispute. Squatters will often try this when they have not been paying rent and violated the original lease but still want to extend their time in the home.
- Protecting Your Interest: If you believe that another party’s actions or claims may jeopardize your property rights or the property’s value, filing a Lis Pendens can protect your interest while the dispute is resolved.
How to File a Lis Pendens
Filing a Lis Pendens in Colorado involves several steps:
- Draft a Lis Pendens Document: You or your attorney will need to draft a Lis Pendens document. This document should contain details about the legal action, the parties involved, and a legal description of the property.
- File with the County Clerk and Recorder: Take the completed Lis Pendens document to the county where the property is located. File it with the County Clerk and Recorder’s office, paying the required filing fees.
- Notify All Relevant Parties: You must notify all parties involved in the legal action, including the opposing party, of the Lis Pendens filing.
- Resolution of the Legal Action: Once the legal dispute is resolved, either through settlement, court judgment, or other means, you can file a “Notice of Lis Pendens Release” with the county to remove the cloud on the property’s title.
Implications for Property Owners
Filing a Lis Pendens can have significant implications:
- Property Sale: It can make selling the property challenging, as potential buyers may be hesitant to proceed with a clouded title.
- Financing: Lenders may be reluctant to provide financing for a property with a Lis Pendens, making refinancing or obtaining a mortgage more difficult.
- Resolution: The Lis Pendens serves as notice that a legal action is ongoing. It can encourage parties to resolve the dispute through negotiation or mediation to clear the title.
- Timing: Timing is crucial when filing a Lis Pendens. Filing it too early or without a valid legal basis can result in legal consequences.
What Is Rule 105 And 106 In Colorado?
In Colorado, Rule 105 and Rule 106 refer to specific rules within the Colorado Rules of Civil Procedure that pertain to Lis Pendens disputes. These rules outline the procedures and requirements for filing and challenging Lis Pendens notices. Here’s an overview of Rule 105 and Rule 106:
- Rule 105 – Lis Pendens (C.R.C.P. 105):
- Purpose: Rule 105 establishes the process for filing a Lis Pendens notice with the county clerk and recorder’s office in Colorado. A Lis Pendens notice is typically filed to provide notice to potential buyers or lenders that a property is involved in a pending legal action, such as a lawsuit or dispute.
- Requirements for Filing: To file a Lis Pendens in Colorado under Rule 105, the following conditions must be met:
- There must be a pending legal action affecting the title or possession of real property.
- The Lis Pendens notice must contain specific information, including the names of the parties involved, a description of the property, and the court where the action is pending.
- The notice must be filed in the county where the property is located.
- Effect: Once filed, a Lis Pendens notice informs third parties that there is a dispute or legal action involving the property’s title or ownership. It may affect the property’s marketability and can be a cloud on the title.
- Rule 106 – Motions Practice (C.R.C.P. 106):
- Purpose: Rule 106 outlines the procedures for challenging a Lis Pendens notice that has been filed. If a party believes that a filed Lis Pendens is improper or unjustified, they can file a motion with the court under Rule 106 to request its removal.
- Challenging a Lis Pendens: To challenge a Lis Pendens in Colorado under Rule 106, the challenging party typically needs to demonstrate one of the following:
- The Lis Pendens was filed without substantial justification.
- The party seeking to remove the Lis Pendens is likely to succeed in the underlying lawsuit.
- The Lis Pendens was filed for an improper purpose, such as harassment or delay.
- Effect: If the court grants the motion to remove the Lis Pendens, it may order the Lis Pendens to be canceled or withdrawn. This can help clear the title and address any cloud on the property’s ownership.
Given the legal complexities involved in filing a Lis Pendens, it is advisable to consult with an experienced real estate attorney in Colorado. They can provide guidance on whether filing a Lis Pendens is appropriate for your situation and ensure that the process is executed correctly.
In conclusion, a Lis Pendens can be a powerful tool for protecting your interests in property-related legal disputes. However, it should be used judiciously and in compliance with Colorado law to achieve the desired outcomes while minimizing potential drawbacks.