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Release of Lis Pendens Surety Bond
What is a Lis Pendens?
A Lis Pendens is simply a notice recorded with the county recorder which states that the right of ownership or possession of a particular piece of real estate is the subject of an existing lawsuit. In other words, the recorded lis pendens is notice to the world that ownership (typically) of a piece of real estate is disputed and that there is a plaintiff in existing litigation who is making claims to the property adverse to the owner of title.
A Lis Pendens isn’t a lien or mortgage against the property but it can have the same effect. A lis pendens is a cloud on the property’s title. The lis pendens generally ties up the property until it is removed, either upon resolution of the litigation or involuntarily by court order. The law regards a lis pendens as a legally binding notice on any subsequent purchaser of, or lender on, the property. Therefore, if a person buys or lends against a property that has a lis pendens recorded against it, they do so subject to, and at the risk of, the existing dispute and litigation. So, should the litigation resolve in favor of the plaintiff, the buyer or lender who invested after the lis pendens recorded could find his rights to the property now in conflict with the prevailing plaintiff.
A Lis Pendens is crippling to the subject real estate. As long as the Lis Pendens is there, you can forget selling or refinancing your property…unless to you’re dealing with a hard money lender or buyer willing to take high risks.
Why take such a financial hit when you can have the court order the lis pendens removed? This will come from having a lawyer filing of a motion to expunge or motion to remove the lis pendens. The lawyer will ask the court for an order removing the lis pendens and for an award of attorney’s fees against the prior owner who recorded it for the cost of bringing the motion.
Probable Validity
To keep the lis pendens, most state laws require that the former owner/filer show the “probable validity” of his lawsuit against the new owner/defendant.
Once the new owner/defendant files the motion to expunge, the law places the burden of proof on the former owner/filer of the lis pendens to justify keeping the lis pendens on the property.
So, the former owner/filer owner will have to put in writing, sufficient to show the court that his case has such merit that he would prevail at trial.
A Release of Lis Pendens Surety Bond is a type of judicial court bond that is posted by the defendant.
The state’s laws or by the the court’s discretion, the defendant may be required to file a Removal or Lis Pendens Bond or “an undertaking” in an amount determined by the court.
This bond or “undertaking” is security that guarantees the payment of costs, legal fees, and damages the that the other party (the filing party) may incur as a result of improper filing of the Motion to Expunge the Lis Pendens.
The bond names and is in favor of the party whom recorded the Lis Pendens (the plaintiff) and serves as protection to them if the filing of the Expungement 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 plaintiff against this.
The premium or cost for a Release of 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 between 1-3%. 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.
The surety will charge premium annually on this bond for as long as it is in force. So, it’s in the best interest of the principal to show the bond, motion, or lis pendens has been discharged by the court. Do this well prior to the bond renewal date, if possible.
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.
