Lis Pendens Mortgage 2026: How a Pending Lawsuit on a Property Stops a Closing

Lis pendens is Latin for suit pending. When a party files a lawsuit that affects real property, they can record a lis pendens in the county land records. This puts every subsequent buyer, lender, and title company on notice that the property's title is subject to the outcome of that litigation. A closing cannot proceed over an active lis pendens.

Common Causes of Lis Pendens

• ✦Divorce proceedings: if the couple cannot agree on disposition of the marital home, one spouse may file a lis pendens to prevent the other from selling without court approval
• ✦Contract disputes: a buyer whose purchase contract was wrongly cancelled may file a lis pendens to cloud the seller's ability to sell to a third party
• ✦Partition actions: when co-owners of a property disagree on whether to sell, either can file a partition suit with an associated lis pendens
• ✦Mechanic's lien foreclosures: a contractor enforcing an unpaid lien through the court system
• ✦Adverse possession claims: a neighboring property owner claiming ownership of a disputed strip of land

Effect on the Mortgage Transaction

Title companies will not issue a title insurance commitment that does not except out the lis pendens or resolve it. The lender will not fund against clouded title. Once a lis pendens is identified in the title search, the transaction is on hold until the underlying lawsuit is resolved. Resolution can happen in several ways: the case is dismissed, the parties settle and file a stipulated discharge, the court issues a final judgment that resolves the ownership issue, or a bond is posted to discharge the lis pendens in jurisdictions that allow this.

Early Identification Is the Only Defense

Order the title search as early in the transaction as possible. Some MLOs request a preliminary title report before the appraisal is ordered on complex transactions. If a lis pendens surfaces, alert the listing agent and the buyer immediately. Determine who filed it and why. A lis pendens filed strategically to delay a sale (as in some contentious divorce situations) may be dischargeable through the court. One filed by a contractor with a valid unpaid claim will require that claim to be satisfied. The attorney involved in the underlying lawsuit is the key contact.