People move a lot of money around during an Illinois divorce. Sometimes, parties to a divorce even move real estate around. It is not uncommon for a divorce litigant to suddenly sell real estate to his brother and declare, “that house was always really my brother’s, anyways.”
Unfortunately, there is no “automatic stay” that keeps Illinois divorce parties from selling or disposing of possible marital property.
Therefore, each spouse has to put the world on notice that any real estate that either spouse owns may be subject to a future division in their pending Illinois divorce.
This formal notice of real estate being subject to a divorce lawsuit is called a “lis pendens”
What Is A Lis Pendens In Illinois?
“Lis pendens” means “suit pending” in Latin.
“The doctrine of lis pendens represents the view that one who acquires an interest in property that is involved in pending litigation stands in the same position as the vendor, is charged with notice of the rights belonging to the vendor’s antagonist, and takes the property subject to whatever valid judgment is ultimately entered in the litigation.” Security Savings & Loan Ass’n v. Hofmann, 537 NE 2d 18 – Ill: Appellate Court, 3rd Dist. 1989
“The legislature has codified the doctrine of lis pendens in an attempt to ameliorate the harsh effects of the doctrine upon innocent subsequent purchasers. Under the statute, subsequent purchasers or encumbrancers of interests in real property are not bound by the results of pending suits unless they have “constructive notice” of the pending proceedings. Before there may be “constructive notice,” a lis pendens notice must be filed in the recorder’s office. First Midwest, a Div. of Jacksonville Sav. Bank v. Pogge, 687 N.E.2d 1195, 293 Ill.App.3d 359, 227 Ill.Dec. 713 (Ill. App. 1997)
Either party to a divorce can file a Notice of Lis Pendens in their pending divorce case.
The Notice of Lis Pendens will say: “LIS PENDENS NOTICE I, the undersigned, do hereby certify that the above entitled cause was filed in the above Court on ___________________________, 20_____ for Petition For Dissolution Of Marriage and is now pending in said Court and that the property affected by said case is described as follows: _______________________________________________________________________________________________________________________________________________________________________ in ______________________________ County, Illinois.”
The Circuit Clerk of the county will stamp said notice and then the notice can be taken to the recorder of deeds office and registered.
Now, anyone who might buy or take title of that real estate will know that the real estate could be subject to division in your divorce case.
“[E]very…action seeking equitable relief, affecting or involving real property shall, from the time of the filing in the office of the recorder in the county where the real estate is located, of a notice signed by any party to the action or his attorney of record or attorney in fact, on his or her behalf, setting forth the title of the action, the parties to it, the court where it was brought and a description of the real estate, be constructive notice to every person subsequently acquiring an interest in or a lien on the property” 735 ILCS 5/2-1901
Now that the possible purchaser has notice of the divorce and cannot say “what’s this divorce got to do with me?”
“[E]very such person and every person acquiring an interest [in the property after a Lis Pendens has been filed] shall…be deemed a subsequent purchaser and shall be bound by the proceedings to the same extent and in the same manner as if he or she were a party thereto.” 735 ILCS 5/2-1901
So, in theory, the purchaser of the marital property will be bound by an Illinois divorce court’s subsequent decision to divide said property…no matter what the terms of the purchase were.
This prevents a spouse from selling a property to a friend who subsequently sells the property to another friend which would cause the other spouse to have to file two new lawsuits against the friends.
“One purpose of lis pendens is the avoidance of endless litigation of property rights precipitated by transfers of interest and the necessity of then filing a new suit against the transferee.” First Midwest, a Div. of Jacksonville Sav. Bank v. Pogge, 687 N.E.2d 1195, 293 Ill.App.3d 359, 227 Ill.Dec. 713 (Ill. App. 1997)
If there was no notice of the pending divorce…the person who purchased the possibly marital property can do whatever they want with the property…unless they are later included in the divorce.
“[P]urchasers are not bound by a pending lawsuit unless they have constructive notice of it, which requires that a lis pendens notice be filed in the recorder’s office.” 55 EAST WASHINGTON DEVELOPMENT, LLC v. Lynd, Ill: Appellate Court, 1st Dist., 2nd Div. 2022
Actual Notice of Lis Pendens vs. Constructive Notice of Lis Pendens
In America, a court cannot take away someone’s property without due process.
Due process is “law in its regular course of administration through courts of justice.” Black’s Law Dictionary (10th ed. 2014)
“At a minimum, due process requires that a deprivation of property cannot occur without providing notice and an opportunity for a hearing appropriate to the nature of the case.” In re Marriage of Beyer and Parkis, 753 NE 2d 1032 – Ill: Appellate Court, 1st Dist., 1st Div. 2001
A person cannot be expected to know that the property they just bought is subject to a divorce…unless they have notice.
Actual notice is being a party to the case. An Illinois divorce court will include other parties into a divorce on a liberal but reasonable basis.
“The court may join additional parties necessary and proper for the exercise of its authority under this Act.” 750 ILCS 5/403(d)
If there’s no actual notice, there still may be constructive notice.
“[T]he statute applies to “constructive notice” situations, that is, situations where actual notice is lacking.” Allen & Korkowski & Associates v. Pettit, 439 NE 2d 102 – Ill: Appellate Court, 4th Dist. 1982
There is no difference as to the effect of constructive notice vs. actual notice.
“[S]ubsequent parties with actual notice of pending proceedings affecting their rights to that property are bound by those proceedings to the same extent as if they had constructive notice under section 2-1901.” First Midwest, a Div. of Jacksonville Sav. Bank v. Pogge, 687 N.E.2d 1195, 293 Ill.App.3d 359, 227 Ill.Dec. 713 (Ill. App. 1997)
Rumors of divorce are not active or constructive notice. It is not notice to have heard “that [the new owner[ knew the couple was having marital difficulties as a basis for the assertion that he had actual knowledge of the pending dissolution action.” Henkel v. Morris, 508 NE 2d 780 – Ill: Appellate Court, 3rd Dist. 1987
Lis Pendens In An Illinois Divorce
If two spouses own a property together in joint tenancy, tenancy in common or tenancy by the entirety, both spouse’s signatures will be necessary to sell or transfer the property. So, neither spouse can just sell the property without the knowledge and consent of the other spouse.
If one spouse owns a property separate from the other spouse, that spouse does not need the other spouse’s permission to sell or transfer the property. That property, even though the property is only in one spouse’s name, might be marital property if the property was acquired after the wedding date.
“‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
Marital property is divisible no matter whose name the property is deeded to. Marital property gets divided in an Illinois divorce.
An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 5/503(d)
In Illinois, “[R]eal property, even property titled in the name of one spouse, can be marital property which is awarded to the other spouse.” First Midwest, a Div. of Jacksonville Sav. Bank v. Pogge, 687 N.E.2d 1195, 293 Ill.App.3d 359, 227 Ill.Dec. 713 (Ill. App. 1997)
Meanwhile, nothing is preventing the spouse who owns the real estate in their name alone from transferring or selling the real estate during the divorce.
“[U]nder the [Illinois Marriage and Dissolution of Marriage] Act, operation of the term “marital property” does not trigger until the time of dissolution. It is only property owned at the time of the judgment of dissolution that the court may classify as “marital property,” and property owned separately by the spouse before dissolution may be disposed of as he/she deems fit, absent any contrary order of the court.” In re Marriage of Schwartz, 131 Ill. App. 3d 351, 355 (Ill. App. Ct. 1985) (Citations Omitted)
An Illinois divorce litigant who knows their spouse has real estate that may be marital property but that real estate is not also in the Illinois divorce litigant’s name needs to file a Notice of Lis Pendens to ensure that property is not sold.
“[L]is pendens may apply to any proceeding, including divorces.” First Midwest, a Div. of Jacksonville Sav. Bank v. Pogge, 687 N.E.2d 1195, 293 Ill.App.3d 359, 227 Ill.Dec. 713 (Ill. App. 1997)
A Lis Pendens only puts the buyer on notice, however. It does not actually prevent the sale or transfer of the real estate property.
“A lis pendens is not an injunction, however, as it does not formally restrain purchase or conveyance.” 55 EAST WASHINGTON DEVELOPMENT, LLC v. Lynd, Ill: Appellate Court, 1st Dist., 2nd Div. 2022
Good luck finding a buyer or financing if there is a Notice of Lis Pendens recorded against the property.
What If I Forgot To File A Notice Of Lis Pendens Against My Spouse’s Property?
Lis Pendens are actually rare in a divorce context. That’s because there are a lot of alternatives to get real estate back into the marital estate if the real estate was sold or transferred.
The new property owner could just be made a party to the divorce and a fraudulent conveyance could be subsequently alleged against the new owner.
A constructive trust could be declared over the real estate making the new owner the trustee of the property on behalf of the estate.
A dissipation of assets could be claimed because the transfer of the real estate was not for a marital purpose.
Finally, the remaining marital property could simply be equitably allocated to the spouse who didn’t transfer away the real estate.
There are lots of options. A notice of lis pendens just eliminates all these possible future headaches by preventing the transfer of the real estate in the first place.
There are hundreds of interacting concepts like Lis Pendens in Illinois’ divorce and family law. Your lawyer should know them! If you would like to discuss the concepts affecting your Illinois divorce, contact my Chicago, Illinois family law firm to discuss your matter with an experienced Illinois divorce attorney.
