A Lis Pendends, Without More, Will Not Provide Notice of Interest on Property!!!!
In its recent opinion, Horry County v. Ray, the South Carolina Court of Appeals held that a county's lis pendens alone did not give notice to a mortgagee of the county's interest on property. The county filed its lis pendens before the mortgagee recorded its mortgage. The bank, nevertheless claimed priority interest.
S.C. Code Ann. Section 15-11-20 provides: "From the time of filing [the lis pendens] only, the pendency of the action shall be constructive notice to a purchaser or encumbrancer of the property affected thereby, and every person whose conveyance or encumbrance is subsequently executed or subsequently recorded shall be deemed a subsequent purchaser or encumbrancer and shall be bound by all proceedings taken after the filing of such notice to the same extent as if he were made a party to the action. For the purposes of this section, an action shall be deemed to be pending from the time of filing such notice."
The Court of Appeals then cited the South Carolina Supreme Court's decision in South Carolina National Bank v. Cook, 291 S.C. 530, 354 S.E.2d 562 (1987) and stated that a lis pendens cannot be filed earlier than 20 days before a complaint is filed. Therefore, failing to file summons and complaint within 20 days of filing a lis pendens renders the lis pendens ineffective, which also gives no constructive notice to subsequent creditors. As a result, the subsequently recorded mortgage by the bank took priority.
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