Escrow & Title
Which of the following best describes a 'lis pendens' recorded against a NC property?
AA voluntary lien placed by the owner
BA notice that a lawsuit is pending that may affect title to the property✓ Correct
CA final court judgment creating a lien
DA lender's first deed of trust
Explanation
A lis pendens ('suit pending') is a recorded notice that a lawsuit is pending that may affect title or ownership of the property, putting prospective buyers on constructive notice.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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.
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