In California, mechanic’s liens, involuntary attachment liens, and restrictive covenants are not valid unless they are recorded. Notice of a pending action, or a “Lis Pendens” may be recorded against a property pursuant to a filed action affecting title or the right to possession of the property. Recording a “Lis Pendens” against real property clouds the title of the property until the pending litigation is resolved or the Lis Pendens is expunged.

In Homeward Opportunities Fund I Trust 2019-2 v. Taptelis, a court of appeal ruled that Homeward’s notice to quit was void because Taptelis had recorded a Lis Pendens on the property before Taptelis was served with a notice to quit.

In Homeward Opportunities Fund I Trust 2019-2 v. Taptelis, Taptelis borrowed $1.24 million from Homeward to purchase a property. After Taptelis defaulted on the loan, Homeward began foreclosure proceedings and recorded a Notice of Default against the property. Two weeks after the Notice of Default was recorded, Tapetelis filed a civil suit which challenged the foreclosure and named Homeward as one of the defendants in the civil suit. Two days prior to the scheduled foreclosure sale Taptelis recorded a Lis Pendens (giving notice of the wrongful foreclosure action) against the property.

Homeward proceeded with the foreclosure sale and then began the eviction process against Taptelis by serving Taptelis with a notice to quit and then bringing an unlawful detainer action to trial against Taptelis. The unlawful detainer trial finished before Taptelis’ wrongful foreclosure action was resolved and Taptelis was denied asserting the wrongful foreclosure claims in the unlawful detainer trial. Homeward prevailed in the unlawful detainer trial and Taptelis appealed.

The court of appeal found that Taptelis’ recorded Lis Pendens clouded title to the property and Homeward’s notice to quit was void because Homeward had not expunged the Lis Pendens and Taptelis’ civil suit was not yet resolved.

Because Homeward did not perfect title by expunging the Lis Pendens before serving the notice to quit, the notice to quit was deemed void and the previous unlawful detainer judgment against Taptelis and in favor of Homeward was also void.

Generally, in California, title must be perfected before a notice to quit may be served. Parties who wish to proceed with an eviction or an unlawful detainer action should be careful to check and obtain counsel to expunge any Lis Pendens recorded against a property before serving a notice to quit.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.