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A Connecticut court has considered property owner's defenses to a Connecticut broker's attempt to foreclose a lien filed by the broker against the owner's property in the amount of the broker's unpaid commission.
Geenty Inc., d/b/a The Geenty Group, REALTORS® ("Broker"), is a licensed real estate broker in Connecticut. The Broker signed a brokerage contract with Henry G. Smernoff ("Owner") pursuant to which the Broker agreed to locate a tenant for the Owner's property. In 1995, the Broker procured a tenant who signed a lease running from 1995-2000.
When the lease expired, the Broker negotiated an extension with the Tenant. The brokerage contract contained a provision addressing renewals, which stated that the Owner would owe the Broker a commission based on the rates set forth in the brokerage contract. When the Owner refused to pay the entire lease renewal commission, the Broker first placed a broker's lien on the property and then filed a lawsuit seeking to enforce the lien.
Broker lien laws currently exist in twenty-one states, and these laws have few common elements- click here to view a chart setting forth the states that currently have these laws as well as a brief description of the various laws. While most states only allow these types of liens on commercial property, the Connecticut lien law allows liens on all types of property but requires that the notice of lien rights must appear in the commission agreement.
The Owner claimed that he was only obligated to pay a commission as he received monthly rental payments from the tenant. The trial court considered whether the brokerage contract allowed the Owner to pay the commission in this manner.
The Superior Court of Connecticut rejected the Owner's "novel position" and awarded the Broker the entire commission amount as well as attorney's fees. The court first considered the Owner's argument that he could pay the commission in monthly installments. The Owner based his argument on the fact that the parties had agreed that the original commission could be paid in two installments, not one lump sum. The court found no support for the Owner's argument in the brokerage contract, and so rejected the Owner's argument that it could pay the commission in monthly installments. The court also rejected the Owner's argument that the brokerage contract was ambiguous, finding that the provisions relating to lease renewals were clear. Thus, the court ruled that the Owner had improperly refused to pay the Broker the entire commission, and so the court awarded the Broker the entire commission. Additionally, the brokerage contract permitted the recovery of attorney's fees and costs, and so the court awarded the Broker those amounts as well.
Geenty, Inc. v. Smernoff, No. CV010447870S, 2002 WL 31256155 (Conn. Super. Ct. Sept. 6, 2002). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion].