12-1191. Notice of pendency of action affecting title to real property; filing; constructive notice to purchaser or encumbrancer; release of notice of pendency of action; failure to issue release; liability

A. In an action affecting title to real property, the plaintiff at the time of filing the complaint, or thereafter, and the defendant at the time of filing the defendant's pleading when affirmative relief is claimed in such pleading, or thereafter, may file in the office of the recorder of the county in which the property is situated a notice of the pendency of the action or defense. In any action to foreclose a mechanics' or materialmen's lien pursuant to title 33, chapter 7, article 6, the lien claimant shall file a notice of pendency of action as prescribed by section 33-998 within five days of filing the action or raising the defense. The notice shall contain the names of the parties, the object of the action or affirmative defense, the relief demanded and a description of the property affected.

B. The recorder shall file the notice and record and index it in the names of the parties to the action, and thereafter a purchaser or encumbrancer of the property affected shall be held to have constructive notice of the pendency of the action and the claims therein made except as prescribed in subsection D of this section.

C. If a notice of pendency of action has been recorded pursuant to this section and the action is dismissed without prejudice for lack of prosecution, the plaintiff or plaintiffs of the action, within thirty days after such dismissal, shall issue to the defendant of the action a release of the notice of pendency of action. Such release shall be in the form of a recordable document. Failure to grant such release shall subject the person filing the notice of action or defense to liability in the amount of one thousand dollars and also to liability for actual damages.

D. After the withdrawal or release of a notice of pendency of action or recordation of a certified copy of an order expunging a notice of pendency of action and before the recordation of a certified copy of the judgment or decree in the action, the following apply:

1. The notice of pendency of action and any of the information derived from the notice does not constitute actual or constructive notice of any of the matters contained in the notice or any matters related to the action.

2. The notice of pendency of action and any of the information derived from the notice does not create a duty of inquiry in any person dealing thereafter with the affected property.

3. Except for a person who is a nonfictitious party to the action at the time of recording the notice of withdrawal, the release of the notice of pendency of action or the order expunging the notice of pendency of action, a person shall not be deemed to have actual knowledge of the action, any of the matters contained in the notice or any matters related to the action, if both of the following apply:

(a) That person for valuable consideration becomes a purchaser, transferee, mortgagee or other encumbrancer of any interest in the real property that is subject to the action.

(b) That person acquires that interest by a conveyance that is recorded after the notice of withdrawal or release or order of expungement and before the recording of a certified copy of a judgment or decree issued in the action.

4. A person described in paragraph 3 shall not be deemed to have notice of the action or notice of any matters related to the action even if the person has actual knowledge of the action or matter and regardless of when or how that knowledge was acquired.