Even couples with the best intentions cannot make their marriages last forever. Divorces can be messy and complex, especially if there are children involved. In addition to agreeing on custody, parenting time schedules, and child support, a divorce must also address the division of property between the spouses. A notice of lis pendens can be an essential tool in this process, ensuring that any claims on real property are clearly marked in public records during the proceedings.
In Illinois, a couple can get a divorce (also known as dissolution) if they can prove that there are irreconcilable differences between them and they have been living separately for at least 6 months. There are no other requirements to get a divorce in Illinois, such as showing that one spouse was at fault or proof of misconduct.
A case out of the Third Appellate District of the Illinois Appeals Court provides an excellent primer on how the legal principle of notice of lis pendens works and how it can impact divorce cases. Lis pendens is an equitable doctrine that binds all subsequent purchasers or encumbrancers of real estate to the outcome of a pending lawsuit affecting the property’s title. The law originally provided that merely filing a lawsuit gave rise to constructive notice to the world, but that has been amended over time to allow for the recording of a notice of lis pendens that gives buyers and encumbrancers actual notice.
The lis pendens doctrine applies to all kinds of property and is important in real estate matters as well as divorce cases. The Appeals Court noted that a lis pendens is only effective when it is recorded, but in the case of real estate that means it must be recorded before any sale or transfer takes place. This notice of lis pendens ensures that all potential transactions are made aware of ongoing litigation, effectively pausing any dealings until a resolution is reached. The Appeals Court further explained that the old common law requirement of a specific right to purchase or lien was a misreading of the statute, which only requires that buyers and encumbrancers be put on notice that there is a potential claim to the property.
The next step in dividing up marital and non-marital property is determining the date of acquisition of each item. This can usually be accomplished by agreement between the parties or, if not possible, through an evidentiary hearing where each party can offer testimony and corroborative physical evidence such as receipts and bank statements. Then, it must be determined whether the property was commingled at any point during the marriage, or if the item’s non-marital character has been tainted by “transmutation” from non-marital to marital. Generally, if an asset was acquired during the marriage and was financed with money earned during the marriage, it will be considered marital. However, there are many exceptions to this rule and each case must be decided on its own facts. As such, the Appeals Court noted that a clear and unambiguous definition of non-marital and marital property is necessary in the law to avoid inconsistent decisions by different courts. Having this definition will also serve to promote consistency and predictability in property division. This reliance on a notice of lis pendens ensures that during a divorce, all parties are aware of any legal claims that may impact their rights and interests in marital properties.
During a divorce, the parties will need to determine how they will split up their property. This includes real estate. Typically, the property will be in one spouse’s name and the other will demand some portion of it. Until the property is fully distributed, it can be difficult to sell or transfer the title. To help prevent a spouse from taking the property without paying their share, the court may issue a lis pendens. This notice of lis pendens indicates a lawsuit involving real estate has been filed and serves to put any potential buyers or lenders on notice of the claim being made against the property.
In a case out of Illinois, the court addressed this very issue. In this case, the husband and wife were divorced. The wife wanted to take out a mortgage to purchase a new home. However, the husband was still listed on the property’s title and had a mortgage on the property. This left the bank with an undivided one-half interest in the property. The mortgagee would be entitled to foreclose on the property should the husband default on the loan. The bank was on notice of the pending divorce action because the notice of lis pendens was filed and recorded before the loan application.
The court found that the lis pendens doctrine applied in this case and that the bank’s rights were divested when the judgment in the dissolution of marriage proceedings awarded the property to the wife. The notice of lis pendens ensured that the bank was aware of the litigation and its implications on the property’s title.
This is an important case because it shows that a notice of lis pendens can apply to any divorce proceeding where the property is involved. The old common law rule of requiring that the plaintiff’s complaint specifically allege a right to the property was meant to protect bona fide purchasers. Those purchasers could not be expected to have knowledge of the pending litigation unless they read through the wife’s divorce complaint. This is no longer the case because the lis pendens statute explicitly applies to all proceedings where a real estate-related claim is involved.
While a notice of lis pendens does not stop someone from selling their property, it does make it more difficult because it will show up in a title search and will likely impact whether or not the buyer can obtain title insurance. A notice of lis pendens can also be expunged or withdrawn by the filing party. In order to do so, they must file a document officially withdrawing the notice of lis pendens and complete any other applicable legal actions. While this can be done, the filing party must understand that they will be exposed to civil penalties.
If a lis pendens is used to harass the owner of real property, they can be held liable for statutory damages. This is why it is important for attorneys to always follow the letter of the law when they file a notice of lis pendens. If a lis pendens has not been filed correctly, the attorney may be held responsible for malpractice and could face disciplinary action by the state bar association.
When a married couple files for divorce, they may have questions about their property rights. Generally, the court will award marital property to one or both spouses based on how the asset was acquired during the marriage. However, if an asset was purchased prior to the marriage and the other party can prove ownership of it, then that property will be considered non-marital property. Determining when a piece of property was acquired requires an evidentiary hearing where the parties can offer testimony as to when they actually acquired the asset along with any corroborating physical evidence, such as receipts, bank statements, etc. A notice of lis pendens serves to inform any potential buyers that the property may be subject to legal claims until the divorce is settled.
If a piece of real estate is in dispute, the law provides a way for a litigant to put potential homebuyers on notice that there is litigation and a claim against that property. This is done by filing a lis pendens in the county real estate records. The filing of a notice of lis pendens ensures that any transaction involving the disputed property takes into account the ongoing litigation.
A lis pendens is a legal notice that there is a pending lawsuit against property and it encumbers (attaches a lien to) the title to that property. It is filed at the same time as a lawsuit involving a claim related to the property and must be recorded in order for it to be valid. A notice of lis pendens will show up on a title search and will affect whether or not a buyer can get a mortgage or other financial support for the property.
While there is no statute limiting its use to real property, Illinois courts have ruled that the lis pendens law covers all types of disputed property. That includes the property rights of a divorce litigant. In Messenger v. McCormack, the supreme court of Illinois ruled that a notice of lis pendens should not prevent a party from disposing of property even if it is non-marital and the other party can lay no claim to it.
The Appellate Court of the Third District has also issued a very helpful primer on the theory and use of a lis pendens. In Chung v. Pham, 2020 IL App (3d) 190218, the defendant agreed to sell his home to the plaintiff but then backed out of the deal. The plaintiff sued for specific performance and a notice of lis pendens was recorded against the home. The day before the lis pendens was recorded, the defendant mortgaged the property.
The Appellate Court held that the mortgagee had actual knowledge of the lis pendens because he or she was a party to the case and thus should have been given constructive notice. Nevertheless, the notice of lis pendens still attached to the property and prevented the mortgagee from obtaining title insurance or selling the property without a release of the lis pendens. This ruling is consistent with other cases in which the lis pendens has been found to attach to all interests in the property irrespective of whether or not the lawsuit involves claims related specifically to that property. However, it does not preclude the possibility of having a lis pendens removed.
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