REDC Auction Drops the Ball

I have a Client that recently won a property at an REDC auction, shortly after the auction we received confirmation that the Seller accepted our winning bid. The next week the property won was listed for sale in REDC's next auction.

The only thing we could do was file a lis pendens.

What is a lis pendens?

A purchaser or encumbrancer who takes title to or records a lien on real property without actual or constructive notice of pending litigation affecting title to that property is not bound by any judgment in the litigation entered after title was received or the lien recorded. Thus, a plaintiff receiving a specific performance decree takes the property subject to title vested or a lien created in a third party who did not have actual or constructive notice of the specific performance action. Such a result completely vitiates a specific performance decree.

A lis pendens is designed to provide actual or constructive notice "to the world" of a pending action that affects title to or an interest in real property. The lis pendens is recorded with the County Recorder and is considered a "conveyance" or a "transfer" within the provisions of the recording laws. After a lis pendens is recorded, all purchasers, encumbrancers, or other interested parties have constructive notice of that action. A lis pendens effectively clouds the title to the property described in the notice and impedes or prevents a sale or encumbrance of the property until litigation is resolved or the lis pendens is expunged.

A lis pendens is not effective if improperly used. It is appropriate only where there is in fact a pending litigation matter of the type in which a lis pendens is authorized. A lis pendens recorded in sup port of an action that does not allege the appropriate type of real property claim does not give constructive notice of the pending litigation to subsequent third parties, even if those subsequent third parties have actual knowledge of the litigation. In short, a recorded lis pendens in the correct kind of action gives notice to the world that a claim exists which affects title to or an interest in that specific real property. A real property action without a lis pendens or the filing of a lis pendens in the wrong kind of action does not give actual or constructive notice to anybody of the real property claim.

It is important to have a Realtor that knows the laws and is willing to fight for your rights.

Call Empire Realty for your next personal real estate consultation at (909) 579-6611, or visit us on the web at Empire Realty.

For information on purchasing your next home in San Bernardino or Riverside county or anywhere in the Inland Empire call Empire Realty at 909-579-6611 or visit us on the web at Empire Realty.

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