A notice of lis pendens is a legal document you might not be familiar with but may occasionally see referenced in a news report. “Lis pendens” is Latin for “pending lawsuit.” (The law still uses Latin from time to time, giving lawyers a chance to show off.) Therefore, logically enough, a notice of lis pendens is a notice of a pending lawsuit.

A notice of lis pendens most often comes into play when someone files a lawsuit claiming an interest in real property (land and buildings) that is adverse to the interest of someone else claiming an interest in the same property. The plaintiff in such a lawsuit wants to make sure no material changes occur to the status of the property while the lawsuit is working its way through the courts.

In furtherance of this objective, the plaintiff records a document in the real estate records of the county where the property is. This document — the notice of lis pendens — states that a lawsuit has been filed affecting the property described in the document. Once recorded, the document creates “constructive notice” of the information it contains. (Constructive notice means that once a document is recorded in the county real estate records, all persons are deemed to know the document’s contents, even though they don’t have actual direct knowledge of its contents.)

The practical effect of a recorded notice of lis pendens is to shut down the ability of the defendant named in the lawsuit to sell, mortgage or otherwise deal with the property. Per the Colorado statute authorizing the recording of a notice of lis pendens, the recorded document “shall be notice to any person thereafter acquiring … an interest in the real property described in the notice … that such interest … may be affected by the action described in the notice.”

As you might expect, property owners consider the recording of a notice of lis pendens against their property to be an act of extortion — holding the property hostage in pursuit of whatever the plaintiff in the lawsuit is wanting to accomplish. (As an example, assume you’re trying to sell your home and someone claiming a right to buy your home under a contract you think has expired records a notice of lis pendens. Your ability to sell the home to someone else is shut down for so long as the notice of lis pendens remains of record.)

In response to the concerns of property owners that a notice of lis pendens has made them a victim of extortion, the Colorado Rules of Civil Procedure provide for an expedited “show cause” proceeding in which a judge will determine whether a notice of lis pendens is proper.

This rule allows a property owner to tee up a hearing on the issue within a few weeks (the speed of light in the judicial system). Promptly after the hearing, the judge conducting the hearing will issue an order deciding whether the notice of lis pendens is serving a valid purpose and might remain in place or must be removed as a “spurious” document impairing title to the property.

As an encouragement to settlement, this rule says a party prevailing in such a show cause hearing is entitled to an award of attorney fees against the party not prevailing. (Note: One of the few things worse than having to pay your own attorney is having to pay the fees of the attorney who just beat up on you in court.)

The Colorado statute authorizing the recording of a notice of lis pendens also creates rules limiting how long such notice can remain in place while the legal dispute giving rise to the notice moves through the judicial process, from trial to appeal. In pursuit of finality and the cleansing of titles to real estate, this statute says a recorded notice of lis pendens expires after six years, unless it is renewed.

Bottom line, if you find yourself in a dispute involving an interest in real property, you’ll want to talk with your lawyer about the appropriateness of, and effect of, a notice of lis pendens.

Jim Flynn is a business columnist. He is with the Colorado Springs firm Flynn & Wright. He can be contacted at moneylaw@jtflynn.com.