Lawsuits that affect interests in real property, such as partition actions, often require courts to adjudicate competing claims regarding who should have title to or possession of real property. In general, courts adjudicating such disputes follow the principle of “first in time, first in right.” Under this principle, “a conveyance recorded first generally has priority over any later-recorded conveyance.” (First Bank v. East West Bank (2011) 199 Cal.App.4th 1309, 1313.)
An important factor that courts consider when adjudicating cases affecting interests in property is whether each party affected by the court’s judgment had notice of the litigation or judgment. A judgment affecting title to or possession of real property that is recorded imparts “constructive” notice to a subsequent transferee or encumbrancer. When recorded, such judgment is effective against any subsequent conveyance or encumbrance, regardless of whether the parties to that judgment receive notice about the subsequent conveyance or encumbrance. (Civ. Code, § 1214.)
In contrast, a judgment that is not recorded with the recorder’s office of the county in which a property is located does not impart constructive notice to subsequent transferees or encumbrancers of the property. Any such judgment generally is not binding on a subsequent transferee or encumbrancer who acquires and records an interest in the property without notice of the prior litigation or judgment. (Civ. Code, § 1214.)
What is a lis pendens?
A “lis pendens,” also known as a “notice of pendency of action,” is a recorded notice of the pendency of a lawsuit in which a real property claim is alleged. (Code Civ. Proc., § 405.2.)
A party asserting a real property claim can record a lis pendens with the county recorder where the real property subject to the lawsuit is located. The procedure for executing and recording the notice, and the contents of the notice, are specified by statute. (Code Civ. Proc., §§ 405, 405.20, 405.61.)
What is the legal effect of a lis pendens?
When duly recorded, a lis pendens imparts constructive notice to subsequent purchasers, transferees, and encumbrancers that litigation is pending that affects the real property described in the notice to the extent the action is pending against the parties named in the action. (Code Civ. Proc., § 405.24.) As a result, any judgment in the action will be binding on subsequent parties even if they acquire their interest before judgment is actually rendered. (CCP § 405.24; Arrow Sand & Gravel, Inc. v. Superior Court (Sunburst Decorative Rock, Inc.) (1985) 38 Cal.3d 884, 888.)
A lis pendens effectively clouds the title to the property described in the notice and impedes a subsequent sale or encumbrance of the property until the litigation is resolved or the lis pendens is expunged. (Malcom v. Superior Court (Green) (1981) 29 Cal.3d 518, 523, fn. 2; BGJ Associates, LLC v. Superior Court (M2B2, LLC) (1999) 75 Cal.App.4th 952, 966-967; Urez Corp. v. Superior Court (Keefer) (1987) 190 Cal.App.3d 1141, 1145.)
While a lis pendens does not legally restrain the owner from conveying or encumbering the property, and the transfer is temporarily effective, the later judgment may determine that the transferor had nothing to convey and is free and clear of interest claimed by the plaintiff in the action. (Deutsche Bank National Trust Co. v. McGurk (2012) 206 Cal.App.4th 201, 213) The constructive notice from a recorded lis pendens continues until a judgment is rendered for either party and the period for appeal expires. (Contini v. Western Title Ins. Co. (1974) 40 Cal.App.3d 536, 542; Garcia v. Pinhero (1937) 22 Cal.App.2d 194, 197.)
After a judgment is rendered, the effect of a lis pendens is also to ensure that the judgment takes priority over a prior transfer or encumbrance that was not recorded before the lis pendens was recorded. (Civ. Code, § 1214.)
How does a lis pendens affect a lease?
A lease is a conveyance within the meaning of Civil Code section 1214. Because a lease is such a conveyance, courts may hold that the filing of a lis pendens gives lessees constructive notice of pending litigation. (See § 6. Operation and effect, generally—Persons affected, Miller and Starr, 3 Cal. Real Est. Digest 3d. Lis Pendens § 6)
In Goldstein v. Ray, the California Second District Court of Appeal held that the filing of a lis pendens gave constructive notice to lessees of an action against their landlord for specific performance of his agreement to sell the building. (Goldstein v. Ray,(1981) 118 Cal. App. 3d 571.) The lessees subsequently leased the building from the owner for five years. Because the court held that the lessees received constructive notice through the lis pendens, the court held that the lis pendens cut off the lessees’ leasehold interest and rendered their lease void.
Thus, after the purchasers of the property obtained a judgment for specific performance, they were entitled to judgment in an unlawful detainer action against the lessees who had taken possession under a void lease. The specific performance judgment gave the purchasers all rights to the property, including the choice of tenants. It was irrelevant whether the lessees were in possession at the time the purchasers actually acquired the title. The Court held that it would only matter if the lessees were in possession when the purchasers filed their lis pendens, which they were not. (Goldstein v. Ray,(1981) 118 Cal. App. 3d 571.)
How does a lis pendens affect a later deed?
A “deed” is defined as “a written instrument by which land is conveyed.” (Black’s Law Dictionary (11th ed. 2019).) As there are numerous types of deeds, discussing every type of deed would exceed the scope of this article; however, two common types of deeds include grant deeds and deeds of trust (which are similar to mortgages).
A grant deed would be a conveyance within the meaning of Civil Code section 1214. Similarly, a deed of trust would be an encumbrance within the meaning of Civil Code section 1214.
Because grant deeds and deeds of trust are conveyances within the meaning of Civil Code section 1214, they are affected by the filing of a lis pendens in the same ways as other such conveyances are affected. Thus, filing a lis pendens would impede a later grant deed or a later deed of trust until the litigation associated with the lis pendens is resolved or the lis pendens is expunged.
How the Underwood Law Firm Can Help
As we’ve seen, a lis pendens may play a critical role in determining how a court adjudicates competing claims regarding who should have title to or possession of real property.
Our knowledgeable attorneys are available to help you navigate the complex web of case law and statutes surrounding partitions. As there are many different ways to waive the right of partition, you may benefit from good legal advice on the topic. If you find yourself contemplating a partition, or if you are faced with defending against a partition lawsuit, then please contact Underwood Law Firm, P.C. for an initial consultation.
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