Property Ownership

In Arizona, a 'lis pendens' recorded against a property means:

AThe property has been sold at a trustee's sale

BThere is pending litigation that may affect title to the property, putting potential buyers and lenders on notice of the legal dispute✓ Correct

CThe property taxes are delinquent and the property may be sold

DThe property has been placed in a living trust

Explanation

A lis pendens ('pending suit' in Latin) is recorded to give constructive notice that litigation affecting the property's title is pending. Anyone who purchases or lends against the property after the lis pendens is recorded takes subject to the outcome of the lawsuit.

People Also Study

Key Terms to Know

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Abstract of Title

A condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.