During a divorce, it is critical for both spouses to do everything they can to protect their assets. One way to do this is by recording a lis pendens. This is a notice of lis pendens that alerts anyone who might buy real estate that there is a lawsuit or claim against it. This prevents people from unknowingly buying property that may end up being a part of a lawsuit in the future. Lis pendens are commonly used in divorce cases when spouses are divvying up property, as well as in foreclosure cases after a borrower defaults on a mortgage.
In a divorce case, a lis pendens can help protect property that was acquired during the marriage by putting the public on notice of the claim against it. This notice of lis pendens can be important in cases where the spouses are trying to sell their home before the judge decides how to fairly divide it between them. If the lis pendens is recorded before the sale, it can make sure that a creditor is not awarded the property before the couple is able to sell their home.
A lis pendens can also help keep one spouse from taking out a second mortgage or equity line of credit on the marital home without the other’s knowledge. This could result in a court awarding the spouse with much less, or even none, of the property for equitable distribution at the conclusion of the divorce proceeding. In this scenario, a notice of lis pendens would also put the bank on notice that there is a lien against the property and they are not a bona fide purchaser.
If a person does try to sell the property while the notice of lis pendens is in effect, the buyer will be subject to liability for the amount of the claim that was filed against the property. The lis pendens must be discharged before the property can be sold, and that usually happens when the lawsuit is resolved. It is a good idea to record a notice of lis pendens on every piece of property that is owned by a party involved in a legal action involving the property.
An experienced divorce attorney can explain the importance of a lis pendens and help clients understand how to protect their property interests during a divorce. This article was brought to you by a Divorce Lawyer. This is not intended to be legal advice or a substitute for the advice of your own attorney. We invite you to contact our office for a consultation to discuss your specific case and how we can best help you.
In Illinois divorce cases, it is possible for a spouse to transfer away real estate assets. That could be done before a divorce filing or even after the case is filed. In order to keep potential property from being transferred, an Illinois divorce lawyer can file a notice of lis pendens. The purpose of this is to put the world on notice that a lawsuit is pending and that if someone were to purchase the property then they would be bound by any orders entered in the divorce action.
In a recent Illinois case, Belva filed a lawsuit against her husband seeking a dissolution of marriage. The property involved was their home. Before the final judgment in the divorce, Belva had a mortgage on the home with First Midwest Bank. First Midwest recorded the notice of lis pendens in the county records. Belva then transferred the home to her trust. She then claimed that because First Midwest had constructive notice of the lawsuit and notice of lis pendens, she was able to take title to the home prior to any order entered in the divorce proceeding.
The court disagreed. First, the court pointed out that while it is true that a lis pendens must be filed to protect the plaintiff, this is not what the law intends. The lis pendens law (735 ILCS 5/2-1901) says that the filing of an action affecting real property is "constructive notice to the world" and that a person who obtains a purchase or encumbrance of the property is bound by any order entered in the litigation. This is different from the old common law rule that a notice of lis pendens only protected bona fide purchasers because those purchasers could be expected to have actual notice of the suit.
A notice of lis pendens also prevents the sale of the property and can bind third parties who might take an interest in the property before the case is settled. That can include a mortgage company or a contractor who did work on the property but was not paid. This could potentially cause problems if the party who takes title has no right to the property or is buying it in bad faith.
This is just one of many interacting concepts in divorce law that a Chicago, Illinois family law attorney should be familiar with. If you are interested in learning more, feel free to reach out to me today to schedule a consultation. I would be happy to discuss any concerns you may have regarding your Illinois divorce case.
There is no automatic stay in an Illinois divorce that prevents either spouse from selling or disposing of real estate that may be part of the marital property. However, Illinois law (735 ILCS 5/2-1901) does allow parties to put the world on notice that real estate in question could be subject to a division in a pending divorce action by filing a lis pendens against the property. Lis pendens means “suit pending” in Latin and is filed with the Clerk of Court and recorded just like a deed at the county office of real estate records. This notice of lis pendens ensures that potential buyers are aware that any transaction may be impacted by the outcome of the divorce proceedings.
A notice of lis pendens shows up on a title search for the property and is an encumbrance on the real estate until such time as the lawsuit is resolved. Whether it be a claim for equitable division of property or even a lawsuit to determine actual ownership, the notice of lis pendens effectively puts the world on notice until the dispute is resolved.
Property and Marital Misconduct
Aside from the obvious that any assets purchased during a marriage are considered marital property, it is important to know that the courts will look at more than just an asset’s acquisition date when determining what is and is not marital property. The court will consider any income or appreciation in value that the asset has received during the marriage (for example, a rental house that increases in value due to market conditions). The monetary gain or loss of any separate property that was converted to marital property is also considered by the court when dividing the assets of a married couple. A notice of lis pendens during a divorce action helps secure the property in question, preventing unauthorized transactions until all factors are considered and a final decision is made.
The same can be said for assets that were transferred between the spouses during the marriage as well as any gifts made to one another. However, there is a limit to how much separate property can increase in value during the marriage and still remain separate. A judge will likely require corroborative physical evidence in order to make a determination of when an asset ceased to be separate and become marital property. A notice of lis pendens filed in cases involving these types of assets ensures that the rights of both parties are considered during the judicial process.
There is nothing in Illinois law that says which spouse gets the home during a divorce but the scales might be tipped toward the spouse with primary custody of young children. This would likely result in the noncustodial parent receiving a larger share of the other assets so that the property division is fair. As always, it is best to meet with an experienced Illinois family lawyer to discuss your particular situation and answer your questions.
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