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Lis Pendens Surety Bond
What is a Lis Pendens?
Lis Pendens - meaning “a suit pending” in Latin, is a notice which concerns the title to real property or some interest in that real property. Lis Pendens is also known as a Notice of Pending Action. It is a written notice filed with the clerk of the court in the county where the property is located and it mostly includes proper information as mandated by that state’s statutes, laws or codes.
A Lis Pendens is not a lien nor an encumbrance on the title of the property. Rather, the purpose of a Lis Pendens notice is two-fold:
to protect the filing party’s alleged rights to the property that is in dispute in the lawsuit, and
to put those interested in the property on notice of this pending lawsuit – this is to put prospective buyers on notice that this property is subject to the outcome of the pending litigation.
A Lis Pendens Surety Bond is a type of judicial court bond that is posted by the plaintiff.
The court, in its discretion, may require that the party filing a Notice of Lis Pendens submit a surety bond to be filed with the court – this Lis Pendens bond is essentially “an undertaking” to the court in an amount determined by the court.
This bond or “undertaking” is security that guarantees the payment of costs, legal fees, and damages the defendant may incur as a result of improper filing of the Lis Pendens by the plaintiff.
The surety bond names and is in favor of the party whom the Lis Pendens is recorded against (the defendant) and serves as protection to them if the filing of the Lis Pendens is found to be frivolous, improper, or in bad faith by the court and, as such, damaging to this party. The bond then is to protect the defendant against this.
The premium or cost for a Lis Pendens bond varies according to the case and the party needing the bond. Typically, the bond rate is a percentage of the bond amount. As a ball park, the range in rates for these court bonds is typically around 1-2%. Again, this depends on the particulars of the case and on the indemnity provided to the surety in the way of financial viability and credit scoring of the bond principal/applicant.
In order to issue the bond, the surety will require a copy of the court documents related to the case. In certain circumstances personal financial information and/or corporate financial information may be required.
These bonds are typically ordered by the court. As such, if a bond isn’t provided by the necessary time then the Lis Pendens will typically be expired, withdrawn, and discharged by the court.
The surety will charge premium annually on this bond for as long as it’s in force. So, it’s in the best interest of the principal to show the Lis Pendens has been discharged by the court prior to bond renewal date. As a side note, in most states, a Lis Pendens will typically stay in effect for one year unless action or relief has been sought and an extension granted by the court.
Contact The ProSure Group. As surety bond experts in business since 1993 in Florida, The ProSure Group has issued hundreds of Lis Pendens Bonds and has partnerships with more than 30 different surety companies. This ensures that we get you the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application and one of our specialists will quickly contact you.
