HB 0461CS

CHAMBER ACTION



1The Committee on Appropriations recommends the following:
2
3     Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to liens on commercial real estate;
7creating ch. 714, F.S., the "Commercial Real Estate Lien
8Act"; providing definitions; specifying conditions under
9which a broker is entitled to a lien on commercial real
10estate; requiring a written instrument; requiring the
11recording of a notice of lien; providing for the contents
12and service of such notice; providing requirements with
13respect to installment and future commissions, leases,
14sales of property before commission is due, and written
15instruments with transferees; providing for enforcement of
16the lien by lawsuit; requiring written demand to initiate
17or file an answer to such lawsuit; providing conditions
18for satisfaction or release of the lien; providing for an
19alternative dispute resolution process; providing for
20assessment of costs, fees, and interest; declaring any
21waiver of lien rights void; providing priority of other
22recorded liens, mortgages, and encumbrances; providing for
23escrow of disputed amounts; amending s. 475.42, F.S.;
24providing that brokers may place liens on property as
25provided by law; providing an effective date.
26
27Be It Enacted by the Legislature of the State of Florida:
28
29     Section 1.  Chapter 714, Florida Statutes, consisting of
30sections 714.001, 714.003, 714.005, 714.007, and 714.009, is
31created to read:
32     714.001  Popular name.--This chapter may be referred to by
33the popular name the "Commercial Real Estate Lien Act."
34     714.003  Definitions.--As used in this chapter, the term:
35     (1)  "Broker" has the same meaning as in s. 475.01.
36     (2)(a)  "Commercial real estate" means any real estate
37other than:
38     1.  Real estate containing one to four residential units;
39or
40     2.  Real estate on which no building or structure is
41located and which is zoned for single-family residential use.
42     (b)  "Commercial real estate" does not include single-
43family residential units such as condominiums, townhouses, or
44homes in a subdivision when sold, leased, or otherwise conveyed
45on a unit-by-unit basis, even though these units may be a part
46of a larger building or parcel or real estate containing more
47than four residential units.
48     (3)  "Commission" means any compensation or consideration
49that may be due a broker licensed in this state for services
50performed within the scope of the broker's license.
51     (4)  "Future commission" means any additional commission
52that may be due a broker as a result of future actions,
53including, but not limited to, the exercise of an option to
54expand the leased premises, to renew or extend a lease, or to
55purchase the property.
56     (5)  "Real estate" has the same meaning as in s. 475.01.
57     (6)  "Transferee" means a person purchasing or otherwise
58receiving any interest in commercial real estate, except a
59sublessee or assignee of a lease.
60     (7)  "Transferor" means the person selling or otherwise
61conveying any interest in commercial real estate, except a
62sublessor or assignor of a lease.
63     714.005  Broker's lien.--
64     (1)  WRITTEN INSTRUMENT.--A broker shall have a lien upon
65commercial real estate or any interest in that commercial real
66estate which is the subject of a purchase, lease, or other
67conveyance to a buyer or tenant of an interest in the commercial
68real estate, in the amount that the broker is due for licensed
69services, including, but not limited to, brokerage fees,
70consulting fees, and management fees, under a valid and
71enforceable written instrument signed by a transferor or the
72transferor's duly authorized agent or by a prospective
73transferee or the transferee's duly authorized agent. The lien
74shall be available to the broker named in the signed instrument,
75and not to any employee or independent contractor of the broker.
76     (2)  ENTITLEMENT OF BROKER TO LIEN.--
77     (a)  A lien under this chapter shall attach to the
78commercial real estate or any interest in the commercial real
79estate if the broker:
80     1.  Is entitled to a fee or commission under a written
81instrument signed in accordance with subsection (1); and
82     2.  Except as otherwise provided in subsections (4)-(7),
83records a notice of lien in the office of the clerk of the
84circuit court of the county in which the property is located
85prior to the actual conveyance or transfer of the commercial
86real estate against which the broker is claiming the lien.
87     (b)  The lien shall attach as of the date of the recording
88of the notice of lien and shall not relate back to the date of
89the written instrument.
90     (c)  A broker shall not have the right under this chapter
91to a lien for commission or other compensation owed to that
92broker pursuant to a sublease or assignment of lease. The
93provisions of this paragraph do not limit or otherwise affect
94the claims or defenses a broker or any other party may have on
95any other basis, in law or in equity.
96     (3)  CONTENTS OF NOTICE OF LIEN.--A notice of lien shall
97state the name of the claimant, the name of the owner of record
98of the commercial real estate, a description of the property
99upon which the lien is being claimed, the amount for which the
100lien is claimed, and the real estate license number of the
101broker. The notice of lien shall recite that the information
102contained in the notice is true and accurate to the knowledge of
103the signator. The notice of lien must be signed by the broker or
104a person authorized to sign on behalf of the broker and must be
105notarized.
106     (4)  COMMISSION DUE IN INSTALLMENTS.--Except as otherwise
107provided in subsections (5)-(7), when payment to a broker is due
108in installments, a portion of which is due only after the
109conveyance or transfer of the commercial real estate, any notice
110of lien for those payments due after the conveyance or transfer
111may be recorded at any time subsequent to the conveyance or
112transfer of the commercial real estate but not later than 90
113days after the date the payment is due. A notice of lien
114recorded prior to conveyance or transfer of the commercial real
115estate claiming all moneys due under an installment payment
116agreement or for future commissions as described in subsection
117(6) shall be valid and enforceable only to the extent it
118pertains to payments due from the transferee to the transferor
119after conveyance or transfer. As payments or partial payments of
120commission are received, a broker shall provide partial releases
121therefor, thereby reducing the amount due the broker under the
122broker's notice of lien.
123     (5)  LEASE OF COMMERCIAL REAL ESTATE.--In the case of a
124lease, a notice of lien must be recorded no later than 90 days
125after the transferee takes possession of the leased premises.
126However, if a transferor personally serves written notice of the
127intended execution of the lease on a broker entitled to claim a
128lien, at least 10 days prior to the date of the intended
129execution of the lease, a notice of lien must be recorded before
130the date indicated in such notice for the execution of the
131lease. The lien shall attach as of the date of the recording of
132the notice of lien and shall not relate back to the date of the
133written instrument.
134     (6)  FUTURE COMMISSION.--If a broker may be due future
135commissions pursuant to a written instrument signed by the then
136transferor or transferee, the broker may record a notice of lien
137at any time after execution of the lease or other written
138instrument which contains such option or options, but may not
139record the notice of lien later than 90 days after the event or
140occurrence on which the claimed future commission occurs.
141Notwithstanding subsection (10), an action to enforce a lien
142under this subsection must be commenced within 2 years after the
143occurrence or transaction on which the future commission is
144claimed.
145     (7)  REAL ESTATE SOLD BEFORE COMMISSION DUE.--In the event
146that the commercial real estate is sold or otherwise conveyed
147prior to the date on which either a future commission or an
148unpaid installment of a commission is due, if the broker has
149recorded a valid notice of lien prior to the sale or other
150conveyance of the real estate, then the purchaser or transferee
151shall be deemed to have notice of and shall take title to the
152real estate subject to the lien. However, if a broker claiming a
153future commission fails to record a notice of lien for future
154commission prior to the recording of a deed conveying legal
155title to the real estate to the transferee, then such broker may
156not claim a lien on the real estate. The provisions of this
157subsection do not limit or otherwise affect claims or defenses a
158broker or any other party may have on any other basis, in law or
159in equity.
160     (8)  WRITTEN INSTRUMENT WITH TRANSFEREE.--If a transferee
161has executed a written instrument in accordance with subsection
162(1), then a lien shall attach to the transferee's interest upon
163the transferee purchasing or otherwise accepting conveyance or
164transfer of the commercial real estate and the recording of a
165notice of lien by the broker in the office of the clerk of the
166circuit court of the county in which the property is located,
167within 90 days after the purchase or other conveyance or
168transfer to the transferee. The lien shall attach as of the date
169of the recording of the notice of lien and shall not relate back
170to the date of the written instrument.
171     (9)  SERVICE OF NOTICE OF LIEN.--A broker shall, within 10
172days after recording a notice of lien, personally deliver or
173mail, by registered or certified mail, a copy of the notice of
174lien to the owner of record of the commercial real estate or the
175duly authorized agent of the owner of record at the address of
176the owner of record as stated in the written instrument on which
177the claim for lien is based or, if no such address is given, to
178the address of the property on which the claim of lien is based.
179Mailing of the copy of the notice of lien is effective when
180deposited in the United States mail with postage prepaid. A
181broker's lien on commercial real estate shall be unenforceable
182if delivery or mailing of the copy of notice of lien does not
183occur within the time period and in the manner required by this
184subsection.
185     (10)  LAWSUIT TO ENFORCE LIEN.--
186     (a)  A broker may bring suit to enforce a lien on
187commercial real estate in the circuit court in the county in
188which the property is located by filing a complaint and sworn
189affidavit that the notice of lien has been recorded.
190     (b)  A broker claiming a lien on commercial real estate
191shall, within 2 years after recording the notice of lien,
192commence proceedings by filing a complaint. Failure to commence
193proceedings within 2 years after recording the notice of lien
194shall extinguish the lien. No subsequent notice of lien may be
195given for the same claim, nor may that claim be asserted in any
196proceedings under this chapter.
197     (c)  A broker claiming a lien on commercial real estate
198based upon an option or other right to purchase or lease shall,
199within 2 years after the conveyance or transfer of the real
200estate under the exercise of the option to purchase or lease,
201commence proceedings by filing a complaint. Failure to commence
202proceedings within this time period shall extinguish the lien.
203No subsequent notice of lien may be given for the same claim,
204nor may that claim be asserted in any proceedings under this
205chapter.
206     (d)  A complaint under this section shall contain a brief
207statement of the contract or instrument on which the lien is
208based as well as its effective date, a description of the
209services performed, the amount due and unpaid, a description of
210the property that is subject to the lien, and other facts
211necessary for a full understanding of the rights of the parties.
212The plaintiff shall make all interested parties of whose
213interest the plaintiff is notified or has knowledge defendants
214to the action and shall issue summons and provide service as in
215other civil actions filed in this state. When any defendant
216resides or has gone out of the state, or on inquiry cannot be
217found, or is concealed within the state so that process cannot
218be served on the defendant, the plaintiff shall cause a notice
219to be given to the defendant or cause a copy of the complaint to
220be served on the defendant in the manner and on the same
221conditions as in other civil actions filed in this state.
222Failure of the plaintiff to provide proper summons or notice to
223the defendant as required by this paragraph shall be grounds for
224judgment against the plaintiff and in favor of the defendant
225with prejudice. All liens claimed under this chapter shall be
226foreclosed in the manner of foreclosing a mortgage under the
227provisions of chapter 702.
228     (11)  DEMAND TO INITIATE OR FILE ANSWER TO LAWSUIT.--Upon
229written demand of the owner of record or a lienee of the
230commercial real estate, or a duly authorized agent of the owner
231or lienee, served on the broker claiming the lien to require
232suit to be commenced to enforce the lien or an answer to be
233filed in a pending suit to enforce the lien, the suit must be
234commenced or the answer filed within 30 days thereafter or the
235lien shall be extinguished. Service of such written demand may
236be made by registered or certified mail, return receipt
237requested, or by personal service.
238     (12)  SATISFACTION OR RELEASE OF LIEN.--
239     (a)  Whenever a notice of lien on commercial real estate
240has been recorded with the clerk of the circuit court and the
241claimed commission has been paid to a broker claiming a lien on
242the property, or when there is a failure to initiate a suit to
243enforce the lien within the time period provided by this
244section, the broker shall acknowledge satisfaction or release of
245the lien in writing, upon written demand of the owner of the
246commercial real estate, within 5 days after payment of the
247amount claimed or within 5 days after expiration of the time
248period in which the complaint to initiate the lawsuit was to be
249filed.
250     (b)  Whenever a notice of lien on commercial real estate
251has been recorded with the clerk of the circuit court and a
252condition occurs that would preclude a broker from receiving
253compensation under the terms of the written agreement on which
254the lien is based, the broker shall provide to the owner of
255record, within 10 days following written demand by the owner of
256record, a written release or satisfaction of the lien.
257     (13)  ALTERNATIVE DISPUTE RESOLUTION.--If the broker and
258the party or parties from whom the commission is claimed agree
259to alternative dispute resolution, the claim shall be heard and
260resolved in the forum on which these parties have agreed. The
261court before which the action to enforce the lien is brought
262shall retain jurisdiction to enter judgment on the award or
263other result made or reached in alternative dispute resolution
264on all parties to the action to enforce the lien. The broker's
265notice of lien shall remain of record and the action to enforce
266the lien shall be stayed during the pendency of the alternative
267dispute resolution process.
268     (14)  ASSESSMENT OF COSTS, FEES, AND INTEREST.--The cost of
269proceedings brought under this section, including reasonable
270attorney's fees, costs, and prejudgment interest due to the
271prevailing party, shall be borne by the nonprevailing party or
272parties. When more than one party is responsible for costs,
273fees, and prejudgment interest, the costs, fees, and prejudgment
274interest shall be equitably apportioned by the court or
275alternative dispute resolution tribunal among the responsible
276parties.
277     (15)  WAIVER OF LIEN RIGHTS VOID.--Except for a
278satisfaction or release of lien provided in consideration of
279payment of the fee or commission claimed by a broker or other
280consideration acceptable to the broker or pursuant to subsection
281(12), any waiver of a broker's right to a lien on commercial
282real estate under this section and any other waiver or release
283of such a lien is void.
284     714.007  Priority of other recorded liens, mortgages, and
285encumbrances.--Valid prior recorded liens, mortgages, and other
286encumbrances shall have priority over a broker's lien under this
287chapter. Such prior recorded liens, mortgages, and encumbrances
288shall include, without limitation:
289     (1)  Any valid mechanic's lien claim that is recorded
290subsequent to the broker's notice of lien but which relates back
291to a date prior to the recording date of the broker's notice of
292lien.
293     (2)  Prior recorded liens securing revolving credit and
294future advances of construction loans.
295     714.009  Escrow of disputed amounts.--Except as otherwise
296provided in this chapter, whenever a notice of lien on
297commercial real estate has been filed with the clerk of the
298circuit court that would prevent the closing of a transaction or
299conveyance, an escrow account shall be established from the
300proceeds from the transaction or conveyance, or other collateral
301or security, in an amount sufficient to release the lien. The
302requirement to establish an escrow account as provided in this
303section shall not be cause for any party to refuse to close the
304transaction or conveyance. The moneys or other collateral or
305security required to be held in escrow under this section shall
306be held until the rights of the parties to the escrowed moneys
307or other collateral or security have been determined by written
308agreement of the parties, by a court of law, or by any other
309process that may be agreed to by the parties for resolution of
310their dispute. Upon the escrow of funds or other collateral or
311security in the amount claimed in the lien, the lien and notice
312of lien shall be automatically dissolved. Upon release of the
313lien by the broker, the broker shall be deemed to have an
314equitable lien on the escrow funds or other collateral or
315security pending a resolution of the broker's claim, and the
316escrow shall not be released until a resolution is reached and
317agreed to by all necessary parties or ordered by a court. The
318parties are not required to follow the escrow procedure in this
319section if alternative procedures that would allow the
320transaction to close are available and are acceptable to the
321transferee in the transaction. If the proceeds from the
322transaction are insufficient to release all liens claimed
323against the commercial real estate, including the broker's lien,
324then the parties are not required to follow the escrow procedure
325in this section.
326     Section 2.  Paragraph (j) of subsection (1) of section
327475.42, Florida Statutes, is amended to read:
328     475.42  Violations and penalties.--
329     (1)  VIOLATIONS.--
330     (j)  A broker or sales associate may not place, or cause to
331be placed, upon the public records of any county, any contract,
332assignment, deed, will, mortgage, affidavit, or other writing
333which purports to affect the title of, or encumber, any real
334property if the same is known to her or him to be false, void,
335or not authorized to be placed of record, or not executed in the
336form entitling it to be recorded, or the execution or recording
337whereof has not been authorized by the owner of the property,
338maliciously or for the purpose of collecting a commission, or to
339coerce the payment of money to the broker or sales associate or
340other person, or for any unlawful purpose. However, nothing in
341this paragraph shall be construed to prohibit a broker or a
342sales associate from recording a judgment rendered by a court of
343this state or to prohibit a broker from placing a lien on a
344property where expressly permitted by contractual agreement or
345otherwise allowed by law.
346     Section 3.  This act shall take effect July 1, 2004.


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