When estate property becomes the subject of litigation — whether because beneficiaries are disputing the will, creditors are suing the estate, or there's a dispute about ownership or rights in the property — the executor faces a critical challenge: how to protect that property from being sold, encumbered, or transferred during the litigation. This is where a Notice of Pendency becomes essential. This legal document, filed with the county clerk, alerts the world that property is involved in pending litigation and that any buyer or creditor takes the property subject to the outcome of that litigation.
In Brooklyn, Queens, Staten Island, and throughout New York, the Notice of Pendency is a powerful tool used in litigation to protect real property. However, it must be filed correctly and maintained properly throughout the litigation, or it will lapse and lose its protective effect. Understanding what a Notice of Pendency is, when to file it, and how to enforce it can make the difference between successfully protecting the estate's property and losing it to a third-party buyer.
What Is a Notice of Pendency?
A Notice of Pendency, often called a "lis pendens" (Latin for "suit pending"), is a legal notice filed in the county clerk's office that alerts the public that specific real property is the subject of pending litigation. The notice includes the case caption, the names of the parties, a description of the property, and the nature of the litigation. Once filed, the notice becomes a matter of public record and appears on title searches.
The key effect of a Notice of Pendency is that it binds any buyer who purchases the property after the notice is filed. That buyer takes title subject to the outcome of the litigation. If the litigation results in a judgment that the buyer is not entitled to the property, the judgment can be enforced against the buyer, and the buyer's recourse is limited. This makes properties with pending notices difficult to sell and difficult to finance, which is precisely the point: it discourages third parties from interfering with the property while the litigation is ongoing.
Under New York law, specifically the Civil Practice Law and Rules (CPLR) Section 6501, any party to pending litigation concerning an interest in real property may file a Notice of Pendency. For estate disputes, this typically means the executor, an interested beneficiary, or a creditor with a claim against estate property.
When Estate Property Disputes Require a Notice of Pendency
A Notice of Pendency should be filed in estate-related litigation whenever there's a dispute that could affect title to or rights in real property. Common scenarios include:
- A beneficiary challenging the will or claiming they're entitled to property the will leaves to someone else
- A creditor suing to attach estate property to satisfy a judgment
- A dispute between a surviving spouse and other beneficiaries about their rights to real property
- Litigation over whether property is correctly included in the estate or should pass outside probate
- Disputes between co-owners or heirs about jointly owned property
For example, imagine an estate's will leaves a house to Child A, but Child B and Child C claim the will is invalid or claim they have rights in the house. Without a Notice of Pendency, the executor might sell the house to a third party while the dispute is pending. That buyer would take clear title, and the disputing beneficiaries would lose their claim to the property itself and could only claim monetary damages from the estate. With a Notice of Pendency, any sale would be subject to the litigation's outcome, protecting the rights of all beneficiaries.
Similarly, if a creditor with a large judgment against the deceased is threatening to attach estate property, filing a Notice of Pendency protects the property by making clear that the property is involved in litigation and that any buyer takes it subject to the outcome.
How to File a Notice of Pendency in New York
Filing a Notice of Pendency involves preparing the document in the proper legal form, determining which county's clerk office to file with (the county where the property is located), and submitting it along with the appropriate filing fee. The notice must include:
- The case index number
- The court where the case is filed
- The names and addresses of the parties
- A legal description of the property
- A statement of the nature of the dispute
The notice is filed in the county clerk's office of the county where the property is situated — the New York County (Manhattan) clerk's office, Kings County (Brooklyn) clerk's office, Queens County (Queens), Bronx County (The Bronx), or Richmond County (Staten Island). If the property is in a jurisdiction outside New York City, you'll file with that jurisdiction's county clerk.
The filing fee is typically modest (around $50-100), and the notice remains effective for the duration of the litigation. However, it's important to maintain the notice's effectiveness by continuing to assert it in litigation and ensuring it's not expired or dismissed.
Enforcing the Notice of Pendency Against a Third-Party Buyer
The real value of a Notice of Pendency is in its enforcement. If someone attempts to buy estate property while a Notice of Pendency is on file, they acquire the property subject to the pending litigation. This means that if the litigation results in a judgment affecting the property's ownership or the buyer's rights, that judgment binds the buyer.
If a buyer purchases the property without properly addressing the pending notice and a judgment is later entered against them, they have limited recourse. They cannot sue the executor or beneficiaries for failing to disclose the litigation. Instead, they're bound by the judgment. This is a powerful protection for the estate during the litigation.
However, enforcement requires that the litigation actually proceed and that a final judgment be entered. If the parties settle the case or reach an agreement, the Notice of Pendency must be removed from the record to allow clear title to pass. The settlement or agreement should address whether the Notice of Pendency will be discharged as part of the settlement.
Duration and Discharge of the Notice
Under CPLR Section 6514, a Notice of Pendency remains effective for five years from the date it's filed. If the case is still pending after five years, the notice can be renewed for an additional five years. However, if the case is resolved, dismissed, or if five years pass without the litigation proceeding, the notice automatically expires or can be discharged.
Once litigation is resolved, the Notice of Pendency should be formally discharged by filing a discharge document with the county clerk. This removes the notice from the property's title and allows clear title to be transferred. If a settlement occurs, the settlement agreement typically includes a provision that the Notice of Pendency will be discharged upon payment of settlement funds or satisfaction of the agreement's terms.
Failing to discharge an expired or moot Notice of Pendency can create problems for the estate later. A title company may refuse to insure title while a notice is on file, preventing the sale of the property. This is why maintaining the notice properly during litigation and promptly discharging it when litigation concludes is important.
Strategic Considerations for Estate Property Disputes
Filing a Notice of Pendency should be a strategic decision made in consultation with your estate advisor. It's a powerful tool, but it also has consequences: it makes the property difficult to sell or finance during the litigation, which may put pressure on the estate's other parties to settle quickly. If the estate needs to raise cash by selling the property, a pending notice makes that impossible.
In some cases, the executor might agree not to file a Notice of Pendency in exchange for the other parties' agreement not to transfer the property during the litigation. In other cases, filing the notice is essential to protect the property from being transferred to an unsympathetic third party.
The decision to file and when to discharge a Notice of Pendency should be made strategically, in consultation with a professional who understands the litigation's dynamics and the estate's best interests.
How Keystone Pinnacle Can Help
Whether you're navigating an estate property sale, exploring investment opportunities, or need guidance through a complex real estate transaction, Keystone Pinnacle Property Advisors is here to help. Our team specializes in guiding families through the real estate aspects of estate settlement throughout Brooklyn, Queens, Nassau County, and the greater New York area.
Contact us today for a free consultation, or call (516) 703-6942 to speak with an advisor.
