HB 0461CS

CHAMBER ACTION



2The Committee on Business Regulation recommends the following:
3
4     Committee Substitute
5     Remove the entire bill and insert:
6
A bill to be entitled
7An act relating to liens on commercial real estate;
8creating ch. 714, F.S., the "Commercial Real Estate Lien
9Act"; providing definitions; specifying conditions under
10which a broker is entitled to a lien on commercial real
11estate; requiring a written instrument; requiring the
12recording of a notice of lien; providing for the contents
13and service of such notice; providing requirements with
14respect to installment and future commissions, leases,
15sales of property before commission is due, and written
16instruments with transferees; providing for enforcement of
17the lien by lawsuit; requiring written demand to initiate
18or file an answer to such lawsuit; providing conditions
19for satisfaction or release of the lien; providing for an
20alternative dispute resolution process; providing for
21assessment of costs, fees, and interest; declaring any
22waiver of lien rights void; providing priority of other
23recorded liens, mortgages, and encumbrances; providing for
24escrow of disputed amounts; amending s. 475.42, F.S.;
25providing that brokers may place liens on property as
26provided by law; providing an effective date.
27
28Be It Enacted by the Legislature of the State of Florida:
29
30     Section 1.  Chapter 714, Florida Statutes, consisting of
31sections 714.001, 714.003, 714.005, 714.007, and 714.009, is
32created to read:
33     714.001  Popular name.--This chapter may be referred to by
34the popular name the "Commercial Real Estate Lien Act."
35     714.003  Definitions.--As used in this chapter, the term:
36     (1)  "Broker" has the same meaning as in s. 475.01.
37     (2)(a)  "Commercial real estate" means any real estate
38other than:
39     1.  Real estate containing one to four residential units;
40or
41     2.  Real estate on which no building or structure is
42located and which is zoned for single-family residential use.
43     (b)  "Commercial real estate" does not include single-
44family residential units such as condominiums, townhouses, or
45homes in a subdivision when sold, leased, or otherwise conveyed
46on a unit-by-unit basis, even though these units may be a part
47of a larger building or parcel or real estate containing more
48than four residential units.
49     (3)  "Commission" means any compensation or consideration
50that may be due a broker licensed in this state for services
51performed within the scope of the broker's license.
52     (4)  "Future commission" means any additional commission
53that may be due a broker as a result of future actions,
54including, but not limited to, the exercise of an option to
55expand the leased premises, to renew or extend a lease, or to
56purchase the property.
57     (5)  "Real estate" has the same meaning as in s. 475.01.
58     (6)  "Transferee" means a person purchasing or otherwise
59receiving any interest in commercial real estate.
60     (7)  "Transferor" means the person selling or otherwise
61conveying any interest in commercial real estate.
62     714.005  Broker's lien.--
63     (1)  WRITTEN INSTRUMENT.--A broker shall have a lien upon
64commercial real estate or any interest in that commercial real
65estate which is the subject of a purchase, lease, or other
66conveyance to a buyer or tenant of an interest in the commercial
67real estate, in the amount that the broker is due for licensed
68services, including, but not limited to, brokerage fees,
69consulting fees, and management fees, under a valid and
70enforceable written instrument signed by a transferor or the
71transferor's duly authorized agent or by a prospective
72transferee or the transferee's duly authorized agent. The lien
73shall be available to the broker named in the signed instrument,
74and not to any employee or independent contractor of the broker.
75     (2)  ENTITLEMENT OF BROKER TO LIEN.--
76     (a)  A lien under this chapter shall attach to the
77commercial real estate or any interest in the commercial real
78estate if the broker:
79     1.  Is entitled to a fee or commission under a written
80instrument signed in accordance with subsection (1); and
81     2.  Except as otherwise provided in subsections (4)-(7),
82records a notice of lien in the office of the clerk of the
83circuit court of the county in which the property is located
84prior to the actual conveyance or transfer of the commercial
85real estate against which the broker is claiming the lien.
86     (b)  The lien shall attach as of the date of the recording
87of the notice of lien and shall not relate back to the date of
88the written instrument.
89     (3)  CONTENTS OF NOTICE OF LIEN.--A notice of lien shall
90state the name of the claimant, the name of the owner of record
91of the commercial real estate, a description of the property
92upon which the lien is being claimed, the amount for which the
93lien is claimed, and the real estate license number of the
94broker. The notice of lien shall recite that the information
95contained in the notice is true and accurate to the knowledge of
96the signator. The notice of lien must be signed by the broker or
97a person authorized to sign on behalf of the broker and must be
98notarized.
99     (4)  COMMISSION DUE IN INSTALLMENTS.--Except as otherwise
100provided in subsections (5)-(7), when payment to a broker is due
101in installments, a portion of which is due only after the
102conveyance or transfer of the commercial real estate, any notice
103of lien for those payments due after the conveyance or transfer
104may be recorded at any time subsequent to the conveyance or
105transfer of the commercial real estate but not later than 90
106days after the date the payment is due. A notice of lien
107recorded prior to conveyance or transfer of the commercial real
108estate claiming all moneys due under an installment payment
109agreement or for future commissions as described in subsection
110(6) shall be valid and enforceable only to the extent it
111pertains to payments due from the transferee to the transferor
112after conveyance or transfer. As payments or partial payments of
113commission are received, a broker shall provide partial releases
114therefor, thereby reducing the amount due the broker under the
115broker's notice of lien.
116     (5)  LEASE OF COMMERCIAL REAL ESTATE.--In the case of a
117lease, sublease, or assignment of lease, a notice of lien must
118be recorded no later than 90 days after the transferee takes
119possession of the leased premises. However, if a transferor
120personally serves written notice of the intended execution of
121the lease on a broker entitled to claim a lien, at least 10 days
122prior to the date of the intended execution of the lease, a
123notice of lien must be recorded before the date indicated in
124such notice for the execution of the lease. The lien shall
125attach as of the date of the recording of the notice of lien and
126shall not relate back to the date of the written instrument.
127     (6)  FUTURE COMMISSION.--If a broker may be due future
128commissions pursuant to a written instrument signed by the then
129transferor or transferee, the broker may record a notice of lien
130at any time after execution of the lease or other written
131instrument which contains such option or options, but may not
132record the notice of lien later than 90 days after the event or
133occurrence on which the claimed future commission occurs.
134Notwithstanding subsection (10), an action to enforce a lien
135under this subsection must be commenced within 2 years after the
136occurrence or transaction on which the future commission is
137claimed.
138     (7)  REAL ESTATE SOLD BEFORE COMMISSION DUE.--In the event
139that the commercial real estate is sold or otherwise conveyed
140prior to the date on which either a future commission or an
141unpaid installment of a commission is due, if the broker has
142recorded a valid notice of lien prior to the sale or other
143conveyance of the real estate, then the purchaser or transferee
144shall be deemed to have notice of and shall take title to the
145real estate subject to the lien. However, if a broker claiming a
146future commission fails to record a notice of lien for future
147commission prior to the recording of a deed conveying legal
148title to the real estate to the transferee, then such broker may
149not claim a lien on the real estate. The provisions of this
150subsection do not limit or otherwise affect claims or defenses a
151broker or any other party may have on any other basis, in law or
152in equity.
153     (8)  WRITTEN INSTRUMENT WITH TRANSFEREE.--If a transferee
154has executed a written instrument in accordance with subsection
155(1), then a lien shall attach to the transferee's interest upon
156the transferee purchasing or otherwise accepting conveyance or
157transfer of the commercial real estate and the recording of a
158notice of lien by the broker in the office of the clerk of the
159circuit court of the county in which the property is located,
160within 90 days after the purchase or other conveyance or
161transfer to the transferee. The lien shall attach as of the date
162of the recording of the notice of lien and shall not relate back
163to the date of the written instrument.
164     (9)  SERVICE OF NOTICE OF LIEN.--A broker shall, within 10
165days after recording a notice of lien, personally deliver or
166mail, by registered or certified mail, a copy of the notice of
167lien to the owner of record of the commercial real estate or the
168duly authorized agent of the owner of record at the address of
169the owner of record as stated in the written instrument on which
170the claim for lien is based or, if no such address is given, to
171the address of the property on which the claim of lien is based.
172If a notice of lien is recorded within 10 days prior to closing,
173a broker is not required to personally deliver or mail a copy of
174the notice of lien. Mailing of the copy of the notice of lien is
175effective when deposited in the United States mail with postage
176prepaid. A broker's lien on commercial real estate shall be
177unenforceable if delivery or mailing of the copy of notice of
178lien does not occur within the time period and in the manner
179required by this subsection.
180     (10)  LAWSUIT TO ENFORCE LIEN.--
181     (a)  A broker may bring suit to enforce a lien on
182commercial real estate in the circuit court in the county in
183which the property is located by filing a complaint and sworn
184affidavit that the notice of lien has been recorded.
185     (b)  A broker claiming a lien on commercial real estate
186shall, within 2 years after recording the notice of lien,
187commence proceedings by filing a complaint. Failure to commence
188proceedings within 2 years after recording the notice of lien
189shall extinguish the lien. No subsequent notice of lien may be
190given for the same claim, nor may that claim be asserted in any
191proceedings under this chapter.
192     (c)  A broker claiming a lien on commercial real estate
193based upon an option or other right to purchase or lease shall,
194within 2 years after the conveyance or transfer of the real
195estate under the exercise of the option to purchase or lease,
196commence proceedings by filing a complaint. Failure to commence
197proceedings within this time period shall extinguish the lien.
198No subsequent notice of lien may be given for the same claim,
199nor may that claim be asserted in any proceedings under this
200chapter.
201     (d)  A complaint under this section shall contain a brief
202statement of the contract or instrument on which the lien is
203based as well as its effective date, a description of the
204services performed, the amount due and unpaid, a description of
205the property that is subject to the lien, and other facts
206necessary for a full understanding of the rights of the parties.
207The plaintiff shall make all interested parties of whose
208interest the plaintiff is notified or has knowledge defendants
209to the action and shall issue summons and provide service as in
210other civil actions filed in this state. When any defendant
211resides or has gone out of the state, or on inquiry cannot be
212found, or is concealed within the state so that process cannot
213be served on the defendant, the plaintiff shall cause a notice
214to be given to the defendant or cause a copy of the complaint to
215be served on the defendant in the manner and on the same
216conditions as in other civil actions filed in this state.
217Failure of the plaintiff to provide proper summons or notice to
218the defendant as required by this paragraph shall be grounds for
219judgment against the plaintiff and in favor of the defendant
220with prejudice. All liens claimed under this chapter shall be
221foreclosed in the manner of foreclosing a mortgage under the
222provisions of chapter 702.
223     (11)  DEMAND TO INITIATE OR FILE ANSWER TO LAWSUIT.--Upon
224written demand of the owner of record or a lienee of the
225commercial real estate, or a duly authorized agent of the owner
226or lienee, served on the broker claiming the lien to require
227suit to be commenced to enforce the lien or an answer to be
228filed in a pending suit to enforce the lien, the suit must be
229commenced or the answer filed within 30 days thereafter or the
230lien shall be extinguished. Service of such written demand may
231be made by registered or certified mail, return receipt
232requested, or by personal service.
233     (12)  SATISFACTION OR RELEASE OF LIEN.--
234     (a)  Whenever a notice of lien on commercial real estate
235has been recorded with the clerk of the circuit court and the
236claimed commission has been paid to a broker claiming a lien on
237the property, or when there is a failure to initiate a suit to
238enforce the lien within the time period provided by this
239section, the broker shall acknowledge satisfaction or release of
240the lien in writing, upon written demand of the owner of the
241commercial real estate, within 5 days after payment of the
242amount claimed or within 5 days after expiration of the time
243period in which the complaint to initiate the lawsuit was to be
244filed.
245     (b)  Whenever a notice of lien on commercial real estate
246has been recorded with the clerk of the circuit court and a
247condition occurs that would preclude a broker from receiving
248compensation under the terms of the written agreement on which
249the lien is based, the broker shall provide to the owner of
250record, within 10 days following written demand by the owner of
251record, a written release or satisfaction of the lien.
252     (13)  ALTERNATIVE DISPUTE RESOLUTION.--If the broker and
253the party or parties from whom the commission is claimed agree
254to alternative dispute resolution, the claim shall be heard and
255resolved in the forum on which these parties have agreed. The
256court before which the action to enforce the lien is brought
257shall retain jurisdiction to enter judgment on the award or
258other result made or reached in alternative dispute resolution
259on all parties to the action to enforce the lien. The broker's
260notice of lien shall remain of record and the action to enforce
261the lien shall be stayed during the pendency of the alternative
262dispute resolution process.
263     (14)  ASSESSMENT OF COSTS, FEES, AND INTEREST.--The cost of
264proceedings brought under this section, including reasonable
265attorney's fees, costs, and prejudgment interest due to the
266prevailing party, shall be borne by the nonprevailing party or
267parties. When more than one party is responsible for costs,
268fees, and prejudgment interest, the costs, fees, and prejudgment
269interest shall be equitably apportioned by the court or
270alternative dispute resolution tribunal among the responsible
271parties.
272     (15)  WAIVER OF LIEN RIGHTS VOID.--Except for a waiver or
273release of lien provided in consideration of payment of the fee
274or commission claimed by a broker or other consideration
275acceptable to the broker or pursuant to subsection (12), any
276waiver of a broker's right to a lien on commercial real estate
277under this section and any other waiver or release of such a
278lien is void.
279     714.007  Priority of other recorded liens, mortgages, and
280encumbrances.--Valid prior recorded liens, mortgages, and other
281encumbrances shall have priority over a broker's lien under this
282chapter. Such prior recorded liens, mortgages, and encumbrances
283shall include, without limitation:
284     (1)  Any valid mechanic's lien claim that is recorded
285subsequent to the broker's notice of lien but which relates back
286to a date prior to the recording date of the broker's notice of
287lien.
288     (2)  Prior recorded liens securing revolving credit and
289future advances of construction loans.
290     714.009  Escrow of disputed amounts.--Except as otherwise
291provided in this chapter, whenever a notice of lien on
292commercial real estate has been filed with the clerk of the
293circuit court that would prevent the closing of a transaction or
294conveyance, an escrow account shall be established from the
295proceeds from the transaction or conveyance, or other collateral
296or security, in an amount sufficient to release the lien. The
297requirement to establish an escrow account as provided in this
298section shall not be cause for any party to refuse to close the
299transaction or conveyance. The moneys required to be held in
300escrow under this section shall be held until the rights of the
301parties to the escrowed moneys have been determined by written
302agreement of the parties, by a court of law, or by any other
303process that may be agreed to by the parties for resolution of
304their dispute. Upon the escrow of funds in the amount claimed in
305the lien, the lien and notice of lien shall be automatically
306dissolved. Upon release of the lien by the broker, the broker
307shall be deemed to have an equitable lien on the escrow funds,
308pending a resolution of the broker's claim, and the escrow shall
309not be released until a resolution is reached and agreed to by
310all necessary parties or ordered by a court. The parties are not
311required to follow the escrow procedure in this section if
312alternative procedures that would allow the transaction to close
313are available and are acceptable to the transferee in the
314transaction. If the proceeds from the transaction are
315insufficient to release all liens claimed against the commercial
316real estate, including the broker's lien, then the parties are
317not required to follow the escrow procedure in this section.
318     Section 2.  Paragraph (j) of subsection (1) of section
319475.42, Florida Statutes, is amended to read:
320     475.42  Violations and penalties.--
321     (1)  VIOLATIONS.--
322     (j)  A broker or sales associate may not place, or cause to
323be placed, upon the public records of any county, any contract,
324assignment, deed, will, mortgage, affidavit, or other writing
325which purports to affect the title of, or encumber, any real
326property if the same is known to her or him to be false, void,
327or not authorized to be placed of record, or not executed in the
328form entitling it to be recorded, or the execution or recording
329whereof has not been authorized by the owner of the property,
330maliciously or for the purpose of collecting a commission, or to
331coerce the payment of money to the broker or sales associate or
332other person, or for any unlawful purpose. However, nothing in
333this paragraph shall be construed to prohibit a broker or a
334sales associate from recording a judgment rendered by a court of
335this state or to prohibit a broker from placing a lien on a
336property where expressly permitted by contractual agreement or
337otherwise allowed by law.
338     Section 3.  This act shall take effect July 1, 2004.


CODING: Words stricken are deletions; words underlined are additions.