The notice of pendency in New York real estate law, part 1

A notice of pendency is a filing that gives public notice of a pending New York state or federal lawsuit in which the parties dispute ownership, possession, enjoyment or use of a particular piece of real estate. Historically known as lis pendens, a notice of pendency constructively gives notice of the ownership dispute to any potential third-party buyer, thereby protecting the plaintiff’s alleged interest being litigated in the suit.

Impact of notice of pendency

If a third party buyer records a purchase or some related transaction after a notice of pendency is filed, the previously filed notice binds the third party to the outcome of the underlying litigation, to the same extent as any party to the lawsuit.

A notice of pendency is not the same as a lien on real estate, but it allows the lawsuit to play out without the plaintiff having to worry that the defendant will sell the property before resolution of the dispute. The notice does alert people that the lawsuit’s outcome could impact the title to the property.

In addition, the notice may directly affect ownership rights of third parties who – before the notice was filed – may have innocently purchased interest in the property or obtained a lien against it, if that interest was not properly recorded before the notice of pendency was filed. Exceptions to this exist where involved parties may have otherwise had knowledge of the circumstances.

Nuts and bolts

Procedurally, a plaintiff seeking to protect his or her interest in a property files the notice of pendency, along with the underlying complaint, in the office of the county clerk of the county where the real estate lies. A notice of pendency lasts for a period three years, which a court may renew for good cause.

In part 2 of this post, we will discuss when a notice of pendency is proper and how the court can cancel it.