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ALL YOU NEED TO KNOW ABOUT LIS PENDENS IN PROPERTY VALUATION

LIS PENDENS IN PROPERTY VALUATION

SATURDAY BRAIN STORMING THOUGHT

26/02/2022

A Lis Pendens is an office notice to the public that a lawsuit involving a claim on a property has been filed. Lis Pendens is connected to the concept

Rule of Lis Pendens

The rule of Lis Pendens lays down that whoever purchases a property during the pendency of an action, is held bound by the judgement that may be made against the person from whom he derived his title to the immovable property, the right to which is directly and specifically in question in the suit or proceeding

Effect of Lis Pendens

Because Lis Pendens are typically recorded in the real property records, the effect of Lis Pendens is that it puts others on notice that there is a dispute connecting the real property

Lis Pendens in Mortgage

A Lis Pendens (literally translated from its Latin term means litigation pending) is a burdon registered against property in circumstances where there is ongoing circuit or High Court proceedings in which a claim is made to an estate or interest in land

Meaning of Lis in Law

Also known as a notice of pendency of action .A notice filed in the public records to indicate that a legal proceeding is pending that asserts a claim against title to or some other interest in real property .The Lis Pendens must include a legal description of the real property

Conditions to be satisfied for Lis Pendens

1) There should be a pending suit or proceeding

2) The suit or proceeding must not be conclusive one

3) The suit or proceeding must be pending in a Court of competent Jurisdiction

4) The suit or proceeding must be one in which a right to immovable property is directly and specifically in question

5) The property directly and specifically in question must be transferred during such pendency

6) The transfer by any party to the suit must affect the right of the other parties till the time the case is finally disposed of

Non-applicability of the Lis Pendens doctrine

1) A sale made by the mortgagee in the exercise of the power as conferred by the mortgage deed

2) In matters of review

3) In case where the transferor is the only party affected

4) In cases of friendly suits

5) In cases where the proceedings are collusive

6) In cases of execution proceedings where the order is passed against the intervener, in such matters, an appropriate remedy shall be a suit filed under order 2, rule 63 of the Code of Civil Procedure, 1908

7) In case of suits involving pending transfers by a person who is not a party to the siut

8) In cases where the property has not been properly described in the plaint

9) In cases where the subject matter of rights concerned in the suit and that which are alienated by transfer are different

Cancellation of notice of Lis Pendens

Section 77 – Cancellation of Lis Pendens

Before final judgment, a notice of Lis Pendens may be cancelled upon oder of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be registered

Pendency

The term pendency means from the commencement of the case till the final disposal.It starts with the presentation of a plaint in a competent court

If the plaint is presented in a wrong court, and before the plaint is moved to the appropriate court, the property involved in dispute is sold or transferred, it would not invoke the application of doctrine

Origin of doctrine of Lis Pendens

In the case of Bellamy v Sabine

Ostensible Owner

A ostensible owner is a person who has all the indications of ownership and looks like the owner of a property but is not the real owner

Aims of Lis Pendens

1) Avoiding endless litigation

2) Protecting either party to the litigation against the act of the other

3) Avoiding abuse of legal process

Lis Pendens includes

1) The style and number, if any, of the proceeding

2) The court in which the proceeding is pending

3) The names  of the parties

4) The kind of proceedings

5) A description of the property affected

Notice of Pendency

When a court considers a lawsuit involving real property, the court may issue a notice of pendency as a provisional remedy .This notice is filed with the property’s deed at the country registry .Thus, a notice of pendency makes it effectively impossible to sell the affected property, or get mortgage on it

Lis Pendants

A List Pendens is an official notice to the public that a lawsuit involving a claim on a property has been filed If a bank is suing the owner of a lot and a new buyer purchases the lot, then the new owner must face lawsuit, sale of the property does not prevent the plaintiff from seeking redress via litigation

Lien Law

A security interest or legal right acquired in one’s property by a creditor

A Lien generally stays in effect until the underlying obligation to the creditor is satisfied

If the underlying obligation is not satisfied, the creditor may be able to take possession of the property involved

Types of Lien

Particular Lien

General Lien

Negative Lien

A negative lien, on the other hand, is a right of a person to restrict another person from disposing of or creating encumbrance over a property belonging to the latter which is in the latter’s possession or control till the time the time of debt or another obligation

Compiled by

Avinash Kulkarni

Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer

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