Commercial broker lien laws allow liens to be filed on commercial properties for the full payment of commissions. In states that have enacted commercial lien laws, there has been a dramatic decline in commission collection litigation and arbitration. Explore the resources on this page for information on how lien laws work, summaries of current laws, news updates, and more.
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What Are Commercial Broker Lien Laws?
Many states have been exploring, or have already enacted, a commercial real estate broker’s commission lien law. These laws allow for a commercial real estate broker to obtain and foreclose upon a lien as a legal remedy against a property if the buyer/seller or lessee/lessor fails to pay the broker the agreed upon commission, as their interests in the real property may apply.
Source: Commercial Broker Lien Laws (CCIM Institute)
Current Lien Laws
Annual Report—Broker Lien Laws (National Association of REALTORS® State Issues Tracker). Login required. Click on State & Local Resources, then click on State Issues Tracker. Click on Access the State Issues Tracker and click on "Broker Lien Laws" in menu on left for state-by-state overview.
State Summaries & Updates
Know Before You Close: 3 Important Aspects of Commercial Liens in Arizona You Don’t Want to Overlook (MacQueen & Gottlieb, PLC, Mar. 2, 2021)
These brokers can acquire lien rights for their commission amount once these terms are met:
- There is a written agreement establishing the commission or compensation of the broker with clear notice that lien rights might arise if the owner fails to pay.
- The broker finds a tenant or entity who is willing and able to sign an acceptable lease agreement with the property owner.
- The broker complies with the requirements of the lien process.
- All payment conditions are satisfied as detailed in the written compensation agreement.
Lien on Me: Understanding the Commercial Real Estate Broker’s Lien Act (Di Monte& Lizak LLC, Feb. 2, 2021)
Illinois allows real estate brokers to place liens for earned commissions on commercial real estate as a way to force payment when a seller or buyer attempts to circumvent payment to the broker. The act is known as the Commercial Real Estate Broker Lien Act, 770 ILCS 15 et. seq. This article addresses the basics on how the act works.
Mountain Law: Realtors Have New Power to Collect Unpaid Commissions (Summit Daily, Jun. 1, 2020)
The new broker lien law does not apply to all transactions … and brokers must carefully satisfy its requirements to enforce their lien rights … but, where the law is applicable, it may prove to be an important tool for commercial real estate brokers to obtain their earned commissions.
The Obscure Commercial Real Estate Broker’s Lien Act (Gross, Romanick, Dean & Desimone)
In order to record the lien, the broker must have a written agreement signed by the owner for the payment of a leasing commission. This requirement applies to both the landlord’s broker and to the tenant’s broker. The lien is perfected by recording a memorandum of the lien in the clerk’s office of the circuit court of the county/city where the commercial real estate is located.
eBooks & Other Resources
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