Lis Pendens

WHAT IS A LIS PENDENS?

The Latin term Lis Pendens translates as ‘litigation pending’. A Lis Pendens puts any third party on notice that there is pending legal challenge regarding land or property. The purpose of a Lis Pendens’ is to benefit a third party who might otherwise be unaware that legal proceedings are in being concerning the land or property. 

Prior to Lis Pendens being given statutory footing, a purchaser was bound by litigation affecting a property at the time of the purchase regardless of the purchaser being a party or having any notice of same. Judgments (Ireland) Act 1844 was the primary legislation governing Lis Pendens until the Land & Conveyancing Law Reform Act 2009 (the “2009 Act”). One of the main ways in which the 2009 Act departed from the 1844 legislation, was that a Lis Pendens could only be vacated by court order. 

The purchaser, with the knowledge of a registered Lis Pendens, can decide to take the land subject to challenge or not. As noted in Cullen v Glencullen Holdings LTD (in receivership)(2020), a Lis Pendens does not restrict the sale of land or assets, it essentially means that the buyer purchases at their own risk. 

REGISTRATION

In order to register a Lis Pendens in the Central Office of the High Court, proceedings must have issued in the Circuit Court or High Court and involve a claim against the interest in land or a claim to have a conveyance and interest in land declared void.
  
As per the decision in Tola Capital Management LLC v Joseph Linders and Patrick Linders (2014), in order to register a Lis Pendens, a party must establish the following: 

1. The plaintiff is claiming proprietary interest in the property;
2. The defendant has an interest in the said property; and
3. The proceedings set out a claim to the interest in the said property.

In cases of registered land, the Lis Pendens is to be registered in the Central Office and on the Folio through the Property Registration Authority. If proceedings have been issued but there is no Lis Pendens registered, a purchaser is entitled to proceed unaffected by any claim in pending litigation. 

REMOVAL OF A LIS PENDENS

A Lis Pendens can be removed by the following methods: 

1. By obtaining a court order on consent.
2. By Notice of Motion Grounded on affidavit seeking its removal when the following occurs: 

a. the action has settled or concluded.
b. there has been unreasonable delay (delay was at issue in Conor Sheeran v Patrick Buckley (2022), whereby the Receiver successfully applied to remove a Lis Pendens due to the difficulties it caused him in selling the subject property. The case highlighted that a person who registered a Lis Pendens should prosecute their claim with reasonable expedition. Mr. Justice Barnville held that unreasonable delay existed as proceedings had not progressed in over 3 years since they came into being, however delay would be assessed on a case by case basis. It is stated in s 123 of the 2009 Act that “A Court may make an order to vacate a Lis Pendens”, highlighting the wide discretion afforded to the court under the legislation, whether to vacate a Lis Pendens or not.
c. the proceedings are not being conducted in a bona fide manner (seen in Kelly and O’Kelly v IBRA Limited (2012) whereby proceedings were deemed to have been set down purely for the purposes of frustrating the sale of the property. The court ruled that there must be a genuine claim to an interest in land and the registration of a Lis Pendens could not be used in an abuse of power.)

If the subject property is sold, the Lis Pendens will remain as a burden registered against the property until an application for its removal has been made under the 2009 Act. However, if a lender or charge holder, with a first ranking charge, sells a property as mortgagee, once the transfer is registered in the Land Registry, it will overreach the Lis Pendens which will then be cancelled by the Land Registry. Any subsequent purchaser cannot be bound by the outcome of proceedings where the Lis Pendens is cancelled from the folio. 

ISSUES IN LITIGATION

Lis Pendens are often depicted as frustrating the ability of a litigant to deal with property due to being associated with uncertainty and complications, as questions are raised over rights of ownership. The registration of a Lis Pendens greatly limits a proprietor’s ability to sell or deal with the property freely without doubts being raised from potential purchasers or mortgagors. 

The current registration methods are disproportionate to the high bar set in order to remove a Lis Pendens. The cost and efforts to register a Lis Pendens are minimal with little or no screening regarding the validity of its registration. Legal advice or authority is not a pre-requisite to registration, same can be affected by a lay person. A Lis Pendens’ effects are far reaching, having been likened to the draconian effect of an injunction, as their removal is a laborious task and their impact is vast. No legal intervention is required to register a Lis Pendens however a court order is required for their removal. Cregan J noted in Tola Capital Management LLC v Joseph Linders and Patrick Linders (2014) that one of the big issues with this area of the law is that a Lis Pendens can operate almost identically to an injunction, without providing any of the necessary protections that accompany injunctive relief. (15-112 Judgment of Mr. Justice Cregan on Westlaw).

If the removal of a Lis Pendens is granted by the court, efforts can be made by the applicant to further frustrate property dealings by issuing further proceedings in court and registering a new Lis Pendens for little cost or difficulty. 

Several arguments have been made surrounding the amendment of the current Lis Pendens legislation and registration system. Suggestions have been put forward to deal with the disproportionate nature of Lis Pendens and it has been argued by the Civil Justice Administration Review Report 2020 (Westlaw IE) that the statutory requirements surrounding the registration of a Lis Pendens under the 2009 Act are not sufficient in protecting against an abuse of process. Steps should be taken to strengthen the requirements and pre-requisites for registration as well as a less expensive, less arduous process for their removal.



For enquiries relating to this, or any litigation matter, please contact the team in OSM Partners.