Hemenway & Barnes AUTHORED LITERATURE

New Law Should Curb Abuse In Real Estate Litigation

Joseph L. Bierwirth, Jr.
Hemenway & Barnes

In a move that should be applauded by developers and real property owners, the Massachusetts legislature recently amended the statutory procedure for obtaining lis pendens -- a document recorded at the registry of deeds as notice to the world of pending litigation over title to property. The presence of a recorded lis pendens ordinarily means that a prospective purchaser cannot obtain title insurance or financing for the property. As a result, lis pendens is often used as leverage by a litigant to hold up a potential sale and extract unwarranted settlement terms.

Under the old rules, a plaintiff could obtain a notice of lis pendens simply by filing a court complaint and claiming a right, title or interest in real property. Judges were obligated to issue the lis pendens, even if the merits of the claim were questionable. Given the ordinary lumbering pace of litigation, it often took years before a lis pendens could be lifted from a property.

The amended statute provides various safeguards against abuse of the lis pendens process:

• The plaintiff's complaint must be sworn under the pains and penalties of perjury, including verification that no material facts have been omitted.
• The Court may decline to issue the lis pendens and instead enter a temporary restraining order preserving the status quo pending further proceedings.
• The rules for obtaining a lis pendens ex parte (i.e., without providing the other side with notice and an opportunity to be heard) have been tightened.
• A defendant may file a so-called "special motion to dismiss" as a means to cut through the plaintiff's allegations and attack a frivolous complaint. If the Court finds that the plaintiff's complaint was frivolous, it can award attorneys' fees to the winning side.

Overall, the amendments to the lis pendens statute represent a welcome reform. The end effect will be to streamline litigation over ownership to real property. This important change in the law should bring greater certainty to property owners and cut down on the amount of frivolous litigation in the courts.