On August 24, 2016, the Fourth District Court of Appeal announced a troubling decision regarding Florida’s lis pendens statute. The case, Ober v. Town of Lauderdale-By-The-Sea, 4D14-4597 (Fla. 4th DCA Aug. 24, 2016), “involves the application” of the statute “to liens placed on property between a final judgment of foreclosure and the judicial sale.” Remarkably, the court holds that liens placed on real property during that timeframe are not discharged by section 48.23, Florida Statutes.
Final judgment was entered in favor of plaintiff in the foreclosure action in 2008. Between 2009 and 2011, a municipality recorded seven liens on the property, relating to code violations. Each violation occurred subsequent to the entry of final judgment. The property was sold in 2012, with a certificate of title being issued. Subsequently, the municipality imposed an additional liens.
The municipality urged that the lis pendens should be deemed to terminate on the date of final judgment, which would mean that the lis pendens would not affect the 10 relevant liens placed on the property. The court agreed, and holds that “a lis pendens bars liens only through final judgment, and does not affect the validity of liens after that date, even if they are before the actual sale of the property.”
This opinion is concerning. It means that, while borrowers are attempting to delay the sale date, and while plaintiff or any would-be purchaser is not in possession of the property, liens may accrue on the property. These liens will encumber the property upon the eventual purchase by someone other than the party that caused the accrual of the liens.