Per Ober: Lis Pendens Protection Is Over Upon Entry Of Final Judgment Of Foreclosure

Author: Starlett M. Massey, Partner at McCumber Daniels

On August 24, 2016, the Fourth District Court of Appeal issued a troubling opinion in Ober v. Town of Lauderdale-By-The-Sea, 4D14-4597, 2016 WL 4468134, interpreting anew the statute governing lis pendens, Florida Statute § 48.23.  The Ober opinion holds that a lis pendens expires upon the entry of the final judgment of foreclosure.  Therefore, the lis pendens no longer precludes the attachment of liens that are recorded after the entry of final judgment through the date of the foreclosure sale.  This holding upends the current understanding of lis pendens protection amongst practitioners and lenders by creating the potential for cloud on title in a variety of circumstances involving a delayed foreclosure sale.lis-pendens-imageLIS PENDENS IN GENERAL

Upon commencing a real estate foreclosure action in Florida, in conjunction with filing a complaint for foreclosure with the clerk of court, a lender records a lis pendens in the Official Records for the county in which the property is located. Lis pendens literally means “pending suit.” Med. Facilities Dev., Inc. v. Little Arch Creek Properties, Inc., 675 So. 2d 915, 917 (Fla. 1996). A notice of lis pendens protects both the lis pendens proponent and third parties. Id. The notice protects the lis pendens proponent’s interest both from extinguishment and from any impairment from intervening liens. Id. The notice also protects future purchasers or encumbrancers of the property by informing them that there is a current suit involving the property’s title. Id.


In Ober v. Town of Lauderdale-by-the-Sea, 2016 WL 4468134 at *1 (Fla. 4th DCA August 24, 2016), the Court addressed the question as to how long a lis pendens protects a lis pendens proponent. The court held that the duration of the action itself determines the duration of the lis pendens.  Id.  The lis pendens takes effect when a notice of action is filed.  An action terminates upon the court’s issuance of a final judgment[1]. Id.  Therefore, the lis pendens does not affect liens that are recorded after that date, regardless of whether they attach prior to the judicial foreclosure sale of the property. Id.

In Ober, a bank recorded a lis pendens against certain property located in Lauderdale-by-the-Sea (the “Town”) on November 26, 2007.  Id. On September 22, 2008, the court entered a final judgment of foreclosure in favor of the bank.  Id. Beginning on July 13, 2009 and continuing through October 27, 2011, the Town recorded seven liens for code violations. Id. The liens stemmed from violations occurring after the court entered its final judgment on September 22, 2008.  Id. On September 27, 2012, Ober purchased the property at foreclosure sale for $37,900.00.  Id. Ober then filed suit to quiet title, attempting to strike the liens from his property. Id. The Town counterclaimed to foreclose on the liens.  Id. Both parties moved for summary judgment and the court granted the Town’s motion for summary judgment and held that the lis pendens only barred liens existing or accruing prior to the date of the final judgment. Id.  The court granted the Town a final judgment of foreclosure against Ober in the amount of $345,092.59.  The current value of the property is approximately $310,000.00.

Ober appealed. Id. In the appeal, the Town again argued that the lis pendens applied only to liens existing or accruing prior to the date of the final judgment. Id. Ober argued that the lis pendens continued through the date of the judicial sale, which in this case was over four years later. Id. The court ultimately held that the lis pendens only prevents the accrual of liens recorded after the court’s issuance of a final judgment, regardless of when the clerk holds the foreclosure sale.  Id.

This opinion is a new interpretation of an existing statute and will control throughout Florida until other opinions are issued.  Trial courts in all jurisdictions in the state will be bound by this case until their own controlling District Court of Appeal weighs in on the matter.


This holding is concerning, as it will create substantial problems for lenders when a foreclosure sale is put on hold after the court enters a final judgment of foreclosure.  A foreclosure sale might be delayed for a number of reasons, with, perhaps, the most common causes being a mortgagor’s filing of a bankruptcy case post-judgment and a lender’s voluntary cancellation or postponement of a sale pending loss mitigation negotiations.

During the period of time after the entry of the final judgment, but before the foreclosure sale is held, the mortgagor remains the titled owner of the property. Thus, once the lis pendens protection expires, liens against the mortgagor can attach to the property without the lender’s knowledge.  Third-party purchasers at a foreclosure sale purchase the property “as is” and are responsible for conducting their own research as to the property being sold, including whether any potential liens or other defects in title exist. Thus, lenders may escape the liability and cost associated with intervening liens if they are not the successful bidder at the foreclosure sale.  The real problems arise for lenders where the lender is the winning bidder at a foreclosure sale and a lien or liens have attached to the property between final judgment and the sale. Worst case scenario, as in Ober, a lender could purchase the property at the foreclosure sale only to have its interest extinguished by lien foreclosure. Alternatively, a lender could purchase the property at foreclosure sale and be forced to pay or settle a lien(s) in order to convey clear title to a third-party purchaser.


Foreclosing lenders should consider changes to their current practices in order to reduce the risk of intervening liens by minimizing delays between the entry of final judgment and sale.  For example, lenders may consider limiting or discontinuing loss mitigation once the court has entered its final judgment.  Lenders may also decline to offer consent judgments with extended sale dates, which might previously have been offered to allow the borrower to undertake loss mitigation efforts.  Where a lender is working with a borrower who is seeking a refinance of the debt, the lender should require an updated title report to and require that the borrower be responsible for eliminating any intervening liens in order to ensure that the new mortgage lien will have the agreed upon priority.  Lenders should additionally consider obtaining updated title reports prior to a delayed foreclosure sale in order to determine the existence of any intervening liens because such liens may alter the lender’s maximum bid at the foreclosure sale.

[1] When no appeal is taken, an action terminates when the time for appeal expires. S. Title Research Co. v. King, 186 So. 2d 539, 544-45 (Fla. 4th DCA 1966).  That time is thirty days after rendition of the order. Fla. R. App. P. 9.110(b).  The Ober court declined to determine whether a lis pendens expires at the time of entry of the final judgment or whether it expires thirty days after the entry of the final judgment because none of the liens in that case were recorded during that time period.

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