Property that is the subject of a lawsuit owned solely in the name of the decedent at the time of the decedent’s death is also subject to probate under New York laws. The property is considered an asset of the decedent’s estate for the benefit of the decedent’s beneficiaries. The owner’s spouse, children or tenants may still occupy a property that has a lis pendens, and the estate may still receive rental income, but any conveyance or transfer of the property would be subject to the interest of the plaintiff in the pending lawsuit until the lawsuit is settled or withdrawn and the transfer of title approved by the New York Surrogate’s Court.
When a lis pendens in a foreclosure litigation action has been filed against the property of a New York decedent, the personal representative is faced with either continuing to make the mortgage payments out of the estate funds to avoid a foreclosure or default on the payments. If the property is worth less than the decedent owed the lender, the personal representative, and the beneficiaries may just decide to let the property get foreclosed upon. If the property is occupied by the decedent’s family or tenants, then the occupants would need to vacate the property prior to the foreclosure sale. Also, if the property is sold at a foreclosure sale, the lender may obtain a deficiency judgment against the estate for the difference between the sale proceeds, and the amount owed by the decedent or the estate.
Background information: A lis pendens is a notice of pending litigation regarding a person’s interest to title to real estate or with regard to a boundary line issues, use of the property or a foreclosure matter. The lis pendens puts a buyer who may be interested in acquiring the property on notice that there is pending litigation concerning the property. Anyone that has an interest in the title to the property or claiming use of the property, can file a lis pendens with the county clerk in the county where the property is located, who will certify the notice and then the notice can be filed with the county recorder’s office in the same county. A lis pendens makes it more difficult for the owner of property or the estate of a decedent to sell, convey or transfer the property to a new buyer or the beneficiaries of the decedent because title would be subject to interest of the plaintiff in the litigation action.
If you don’t qualify for a mortgage or you are no longer interested in buying the property and you just want your deposit back, then you can sue the seller for the deposit but you probably cannot place a lis pendens on the property because the lawsuit is not about the property, it’s only about the deposit.
Lis pendens matters involving New York estates are complex. If you are involved in a lis pendens litigation matter concerning a New York estate, it is recommended that you seek the assistance of a New York probate and estate attorney. The attorney can prepare any necessary documents and represent you in court.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at 212-233-1233.