Property ownership is a common dispute that arises as a home or piece of land is legally conveyed to others over time. It is not uncommon for someone to record a false or fraudulent lien against real property in order to prevent the property owner from selling the property to a good faith purchase. One type of false lien is known as a lis pendens, and in order to file one, certain statutory requirements must be met. One such requirement is that the lis pendens must be accompanied by a lawsuit, the action which is matter affecting title to real property. Because true ownership is a crucial piece of information that affects the validity of a property sale, there are multiple ways to clear title if a fraudulent lis pendens is filed against a property.
Fraudulent lis pendens in Arizona can quickly become a hassle that ties you in costly paperwork and court fees. Here’s a short guide on how to get them removed faster.
What Is a Notice of Lis Pendens?
A notice of lis pendens is a document stating that the property named in the notice is subject to a lawsuit over ownership. Those who file a lis pendens will do so because they have taken issue with title and are seeking ownership of the named property. Therefore, the person who took this adverse action may be able to win the title to the property, even if someone else bought it and was unaware of the lis pendens.
In other words, a lis pendens is a notice of a potential lien. A lien is a claim that a creditor has against property, meaning the creditor can foreclose on the property in the event of a default. There are consensual liens, such as mortgages and deeds of trust, but there are also wrongful liens that require legal action to remove. It is important to note that a lis pendens does not guarantee a lien will be placed on the property.
Why a Lis Pendens Matter
There are a few reasons why it is important to be aware of any lis pendens that has been filed in connection with your property. One is securing title insurance, which will not be issued to any homeowner who owns a property that has a lis pendens recorded against him or her. Another is ownership, which affects the future sale of the property while the lis pendens is still active. Any sale is invalid until the lis pendens is released by court order.
Unfortunately, anyone can pay the recorder a small fee to record a lis pendens, but there are Arizona statutes to prevent fraudulent lis pendens.
How to Remove Fraudulent Lis Pendens in Arizona
Per A.R.S. § 33-420, anyone who records a wrongful lien against a property is liable to pay the title holder $5,000 or triple the actual damages, plus attorney’s fees, if the title holder wins the lawsuit and proves the lien was wrongfully recorded against the property. The title holder would then be able to bring action against the person who filed the fraudulent lis pendens and move to quash the notice. There must be proof the action was “forged, groundless, contains a material misstatement or false claim or is otherwise invalid.”
In the event of a fraudulent lis pendens that results in a property lien, homeowners also have the option to pursue quiet title action.
Quiet Title Action in Arizona
Homeowners with wrongful liens can take action against another party with adverse interest—in this case, the person who filed the fraudulent lis pendens—to clear title. A.R.S § 12-1101 authorizes a quiet title action to establish clear ownership of the property. If successful, the named lienholder is also barred from asserting adverse interest in the future. Consult an Arizona real estate attorney to help you seek removal if you feel a property lien is wrongful, fraudulent or inaccurate.
Find an Experienced Phoenix Real Estate Attorney
If you have received a notice of lis pendens that you believe is fraudulent, you want to make sure you have experienced legal representation. MacQueen & Gottlieb has significant experience with resolving legal disputes involving real estate, including removing wrongful liens and quiet title actions. Contact us today at 602-562-7218 to schedule an initial consultation or make an appointment online.