Illinois Real Estate Practice Exam

When a suit is filed that affects title to real estate, what notice is recorded to indicate that litigation is pending, which may lead to a foreclosure?

1. Deed of Reconveyance

2. Easement Agreement

3. Lis Pendens

4. Subordination Agreement

The correct answer is: Lis Pendens

The correct answer is indeed the option that refers to "Lis Pendens." This term signifies a legal notice that is filed to alert the public that a lawsuit has been initiated which may impact the title or ownership of a specific piece of real estate. The recording of a Lis Pendens serves a critical purpose by notifying potential buyers or lenders that there is an ongoing legal dispute related to the property, thereby protecting the interests of the parties involved in the lawsuit. This type of notice is particularly relevant in cases such as foreclosures, where the litigation could ultimately affect who holds the title to the property. By recording the Lis Pendens, it ensures that anyone who conducts a title search will see the pending litigation as a potential concern before making any transactional decisions regarding the property. The other terms mentioned relate to different aspects of real estate transactions or property rights. A Deed of Reconveyance is used to transfer title from a trustee back to the borrower after a loan has been fully paid. An Easement Agreement outlines the rights of one party to use a portion of another party's property for a specific purpose. A Subordination Agreement details the priority of debts against a property. None of these terms serve the specific purpose of indicating that litigation is impacting the title of the