Property Ownership
In Colorado, a 'lis pendens' recorded against a property means:
AA. The property has been sold at auction
BB. There is pending litigation affecting title to the property, providing constructive notice to potential buyers✓ Correct
CC. The property tax is overdue
DD. The property has a new lien from a contractor
Explanation
A lis pendens ('suit pending') is a recorded notice that litigation affecting title to the property is pending in court. It provides constructive notice to potential buyers and lenders that the title may be subject to a court judgment, making the property difficult to sell or finance until the litigation is resolved.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance 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 TitleA 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.
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