What is a Release of Lis Pendens Bond?

If you are in the throes of a foreclosure lawsuit that blocks you from selling a property, then a Lis Pendens case may be filed against you. As a defendant, what will be your means of recourse if there is already a notice in the public land records alerting people that your property for sale is pending litigation?

Here’s what you can do: File a Release of Lis Pendens. This means canceling or negating the Lis Pendens claim.

Then you will need to post a Release of Lis Pendens Surety Bond.

To understand how a Release of Lis Pendens Bond works, you must first have knowledge of why a Lis Pendens Bond is used.

A Lis Pendens Bond is a surety bond for plaintiffs that guarantees they have filed the Lis Pendens claim in earnest and not under pretenses. Lis Pendens means “pending lawsuit” in Latin, where it may hinder the possibility of a sale, loan or negotiation of a sale price of a property. Mortgage lenders and couples undergoing divorce proceedings use Lis Pendens to prevent a debtor or ex-spouse to sell a property.

A Release of Lis Pendens is a counterclaim wherein it provides recourse for defendants pursuing to sell a property. The Release of Lis Pendens Surety Bond ensures to cover the cost of the Lis Pendens to release the property back to the defendant.


Is Release of Lis Pendens Bonds mandatory?

Posting a Release of Lis Pendens Bond is not compulsory and will depend on the defendant. If the defendant wishes to fight the legality of the Lis Pendens Bond, then he or she can make an appeal to the court to file a Release of Lis Pendens and, thus, secure a bond. In fact, a Release of Lis Pendens may allow a defendant to sell a property before the court issues a decree.


Is a Release of Lis Pendens Bond the only option to cancel a Lis Pendens Bond?

While a defendant may feel to post a Release of Lis Pendens as a counter measure to restore the marketability of a property’s title (most especially in California), there are procedures used to remove property title defects. These are called “quiet title lawsuits” and may cover Lis Pendens notices and old liens.

The defendant may file a motion requesting the court to release a Lis Pendens notice in any case in which, as defined and required by law:

  • the Lis Pendens is not intended to affect real property
  • the Lis Pendens notice does not contain verifiable information
  • the defendant did not receive litigation notice recording the Lis Pendens notice
  • the Lis Pendens notice is invalid or became ineffective


How much does a Release of Lis Pendens Bond cost?

There is a fixed bond amount determined by the ruling court for the Release of Lis Pendens Bond. However, this does not limit the court when the plaintiff is entitled to damages. The court may find the damages are greater than the bond and the plaintiff will be awarded a larger amount.

The cost of Release of Lis Pendens Bond may depend on the financial credibility of the applicant. Also, it may be based on the value of the property in question. The court’s decision to cover interest and court costs may also affect the bond amount.


How long does a Release of Lis Pendens may take effect?

A property can be under pending litigation for years. To strike a Lis Pendens notice, there should be a certified copy of an order releasing a Lis Pendens notice. The certified copy will be recorded, and the Lis Pendens will no longer give constructive warning of the litigation to any third party who has an interest in the property that is subject to dispute.

On that premise, a Release on Lis Pendens Bond may not be mandatory, but for defendants, it gives them the opportunity of clearing the Lis Pendens notice and getting that property back on the market.

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Release of Lis Pendens Bond Infographic
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