Filing of a Notice of Pendency Serves as a Substitute for the Recording of a Conveyance or a Contract
This week we wanted to draw your attention to an interesting decision out of the 2nd Department which reversed a lower Court’s Order and granted a Defendant’s motion to cancel Plaintiff’s Lis Pendens and further dismissed Plaintiff's Complaint which claimed that Plaintiff owned a twenty-five (25%) percent interest in the property by way of an unrecorded agreement.
The relevant facts of, as well as a link to, the case are set forth below.
In 2008, Lionel Ouellette (the record owner of a certain property), the Plaintiff, and two others agreed in writing that they would each have a one-fourth interest in the property. On June 7, 2017, Vertex Investor, Inc. purchased the property from Ouelette. In 2011, the Plaintiff commenced an action seeking a judgment that he owned a one-fourth interest in the property. On June 20, 2017, the Plaintiff filed a notice of pendency. On July 10, 2017, Vertex recorded its deed. The Supreme Court, Kings County, denied Vertex’s motion for summary judgment dismissing the complaint insofar as asserted against it, ruling that it was the sole owner of the property, and cancelling the lis pendens. The Appellate Division, Second Department, reversed and granted Vertex’s motion, and remitted the matter for entry of a judgment on that basis. According to the Appellate Division,
“…Vertex established, prima facie, that it purchased the subject property for valuable consideration, without actual or constructive notice of the plaintiff’s alleged interest [citation omitted]. Contrary to the plaintiff’s contention, his filing of a notice of pendency against the property before Vertex filed its deed did not negate Vertex’s status as a good-faith purchaser [citation omitted]. ‘[H]aving failed to avail itself of the protection of either Real Property Law Sections 291 [“Recording of conveyances”] or 294 [“Recording executory contracts and powers of attorney”] the plaintiff may not successfully contend that its filing of a notice of pendency serves as a substitute for the recording of a conveyance or a contract’ [citation omitted].”
The Appellate Division also held that the Plaintiff’s occupancy at the property did not defeat Vertex’s status as a bona fide purchaser and that the 2008 agreement did not satisfy the statute of frauds. Bello v. Ouellette, 2022 NY Slip Op 07043, decided December 14, 2022, is posted at
https://law.justia.com/cases/new-york/appellate-division-second-department/2022/2020-00329.html
This case is another important reminder to properly and timely record Agreements and/or Contract that purport to give a party an interest in Real Property. As always, the Team here at Home is available to assist you with all of your Title needs and questions.
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