In short: No. Once a property owner proffers evidence of the loss a lis pendens is likely to cause, a Florida trial court cannot deny a bond without giving the owner an evidentiary hearing. In Bankers Lending Services v. Regents Park Investments, the Third District granted certiorari and quashed an order denying a bond without a hearing on June 28, 2017. The court did not decide whether a bond must be set, only that the owner gets the chance to prove its damages.
The Facts
Regents Park Investments contracted to buy several parcels from Bankers Lending Services. The deal did not close. In August 2015 Regents sued for specific performance and recorded a notice of lis pendens on the parcels.
In February 2016 the trial court discharged the lis pendens. In April 2016 a lender to Bankers Lending recorded a quitclaim deed that Bankers Lending had signed in 2012 as part of a loan and forbearance arrangement. That recording took title out of Bankers Lending. In July 2016 the Third District reversed the discharge and ordered the lis pendens reinstated. Regents Park Invs., LLC v. Bankers Lending Servs., Inc., 197 So. 3d 617 (Fla. 3d DCA 2016).
On remand the trial court reinstated the lis pendens back to August 2015. Bankers Lending asked for a lis pendens bond and filed an affidavit of the legal fees it said the lis pendens had cost it. The court denied the bond without an evidentiary hearing, accepting Regents’ argument that Bankers Lending no longer owned the property and so could not be harmed. Bankers Lending sought review. At oral argument the parties pressed these points:
- Bankers Lending argued it held title from the filing of the suit until April 2016, that the 2012 quitclaim deed was held in escrow and never delivered as a completed conveyance, and that both sides had told the trial court an evidentiary hearing was required. Its counsel said the fees it sought to secure were about $103,000.
- Regents argued that a bond is never automatic, that the trial court has broad discretion, that Bankers Lending had already given up the property, and that a fee claim in its pleadings gave it an adequate remedy.
- The panel focused on whether the court could exercise its discretion on a bond at all without first hearing the evidence of damages.
The Decision
The Third District granted the petition for certiorari and quashed the order denying the bond motion on June 28, 2017. It held that certiorari, not a non-final appeal, is the proper way to review an order on a lis pendens bond.
On the merits, the court held that Bankers Lending had standing to ask for a bond. It owned the property from the August 2015 filing until the April 2016 deed was recorded, and the lis pendens could have caused it loss during that time. A trial court may decide that no bond is needed, but it departed from the essential requirements of law by ruling without affording Bankers Lending an evidentiary hearing to prove its likely loss. The court expressed no view on whether Bankers Lending could prove damages. If the trial court finds a bond appropriate, it may make the lis pendens depend on the bond being posted.
Rehearing and rehearing en banc were denied on July 26, 2017, and Bankers Lending’s motion for appellate fees was conditionally granted. A notice invoking the Florida Supreme Court’s discretionary jurisdiction followed, and that court declined to accept jurisdiction on November 9, 2017.
The Law
Section 48.23 is Florida’s lis pendens statute. Under section 48.23(1)(b), a suit for specific performance that is not founded on a duly recorded instrument does not bind later buyers or lenders unless a notice of lis pendens is recorded. The opinion noted that this is why Regents had to record one.
When the claim is not founded on a recorded instrument or a chapter 713 construction lien, section 48.23(3) says the court controls and discharges the lis pendens as it would grant and dissolve injunctions. Under the Florida Supreme Court’s decision in Medical Facilities Development, Inc. v. Little Arch Creek Properties, Inc., the trial court has discretion to require the claimant to post a bond, but the owner must show the damages it is likely to suffer if the lis pendens turns out to be unjustified.
In a footnote, the Third District said attorney’s fees may be considered in setting the amount of a bond if the trial court finds a bond appropriate.
Lessons
- An owner who wants a lis pendens bond should put real evidence of likely loss in front of the court, such as lost sales, carrying costs and fees, and ask for an evidentiary hearing on the record.
- A bond is not automatic. The court still has discretion, but it has to exercise that discretion after hearing the evidence.
- Losing title later does not erase the period when the owner held title and the lis pendens was clouding it.
- Unrecorded deeds held by a lender in escrow create title questions of their own. Know what has been signed and who holds it before you litigate over the property.
- Orders on lis pendens bonds are reviewed by certiorari in the Third District, so frame the appellate filing accordingly.
Source: Bankers Lending Servs., Inc. v. Regents Park Invs., LLC, 225 So. 3d 884, No. 3D17-0439 (Fla. 3d DCA June 28, 2017) (petition for certiorari granted, order quashed); ACIS docket; earlier appeal: Regents Park Invs., LLC v. Bankers Lending Servs., Inc., 197 So. 3d 617 (Fla. 3d DCA July 20, 2016).
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
Lis Pendens Bond Denied Without a Hearing: Did the Owner Still Hold Title When It Asked?
Go Deeper
- Can a Buyer Lock Up Every Unit in a Condo With a Lis Pendens? (All Seasons v. Patrician Hotel)
- Discharged Lis Pendens Doesn't Shield a Lender From a Fraud Claim (Weiss v. BI 27)
- A Contract Remedy That Wasn't Exclusive: Specific Performance Survives (Regents Park v. KAI Properties)
Frequently Asked Questions
Do I have to post a bond to keep a lis pendens in Florida?
Not always. When the suit is not founded on a recorded instrument, the trial court controls the lis pendens under section 48.23(3) and has discretion to require a bond. The owner must show the damages it is likely to suffer if the lis pendens is unjustified.
Can a judge deny a lis pendens bond without a hearing?
In Bankers Lending v. Regents Park, the Third District held that once the owner proffered evidence of its likely loss, denying a bond without an evidentiary hearing departed from the essential requirements of law. The judge can still decline to require a bond after hearing the evidence.
Can attorney's fees be part of a lis pendens bond?
Yes. The Third District noted that attorney’s fees may be considered in setting the amount of a bond if the court finds a bond appropriate. In this case the owner’s counsel said its fees were about $103,000.
What happens to a lis pendens if the owner sells or loses the property?
The lis pendens stays on the property and binds later owners. The original owner may still seek a bond for the harm it suffered while it held title, as the court allowed here for the months before the deed was recorded.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
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