HB 1459

1
A bill to be entitled
2An act relating to liens on commercial real estate;
3creating ch. 714, F.S., the "Commercial Real Estate Lien
4Act"; providing definitions; specifying conditions under
5which a broker is entitled to a lien on commercial real
6estate; requiring a written instrument; requiring the
7recording of a notice of lien; providing for the contents
8and service of such notice; providing requirements with
9respect to installment and future commissions, leases,
10sales of property before commission is due, and written
11instruments with transferees; providing for enforcement of
12the lien by lawsuit; requiring written demand to initiate
13or file an answer to such lawsuit; providing conditions
14for satisfaction or release of the lien; providing for an
15alternative dispute resolution process; providing for
16assessment of costs, fees, and interest; declaring any
17waiver of lien rights void; providing priority of other
18recorded liens, mortgages, and encumbrances; providing for
19escrow of disputed amounts; amending s. 475.42, F.S.;
20providing that brokers may place liens on property as
21provided by law; providing an effective date.
22
23Be It Enacted by the Legislature of the State of Florida:
24
25     Section 1.  Chapter 714, Florida Statutes, consisting of
26sections 714.001, 714.003, 714.005, 714.007, and 714.009, is
27created to read:
28     714.001  Popular name.--This chapter may be cited as the
29"Commercial Real Estate Lien Act."
30     714.003  Definitions.--As used in this chapter, the term:
31     (1)  "Broker" has the same meaning as in s. 475.01.
32     (2)(a)  "Commercial real estate" means any real estate
33other than:
34     1.  Real estate containing one to four residential units;
35or
36     2.  Real estate on which no building or structure is
37located and that is zoned for single-family residential use.
38     (b)  "Commercial real estate" does not include single-
39family residential units such as condominiums, townhouses, or
40homes in a subdivision when sold, leased, or otherwise conveyed
41on a unit-by-unit basis, even though these units may be a part
42of a larger building or parcel or real estate containing more
43than four residential units.
44     (3)  "Commission" means any compensation or consideration
45that may be due a broker licensed in this state for services
46performed within the scope of the broker's license.
47     (4)  "Future commission" means any additional commission
48that may be due a broker as a result of future actions,
49including, but not limited to, the exercise of an option to
50expand the leased premises, to renew or extend a lease, or to
51purchase the property.
52     (5)  "Real estate" has the same meaning as in s. 475.01.
53     (6)  "Transferee" means a person purchasing or otherwise
54receiving any interest in commercial real estate, except a
55sublessee or assignee of a lease.
56     (7)  "Transferor" means the person selling or otherwise
57conveying any interest in commercial real estate, except a
58sublessor or assignor of a lease.
59     714.005  Broker's lien.--
60     (1)  WRITTEN INSTRUMENT.--A broker shall have a lien upon
61commercial real estate or any interest in that commercial real
62estate which is the subject of a purchase, lease, or other
63conveyance to a buyer or tenant of an interest in the commercial
64real estate, in the amount that the broker is due for licensed
65services, including, but not limited to, brokerage fees,
66consulting fees, and management fees, under a valid and
67enforceable written instrument signed by a transferor or the
68transferor's duly authorized agent or by a prospective
69transferee or the transferee's duly authorized agent. The lien
70shall be available to the broker named in the signed instrument,
71and not to any employee or independent contractor of the broker.
72     (2)  ENTITLEMENT OF BROKER TO LIEN.--
73     (a)  A lien under this chapter shall attach to the
74commercial real estate or any interest in the commercial real
75estate if the broker:
76     1.  Is entitled to a fee or commission under a written
77instrument signed in accordance with subsection (1).
78     2.  Except as otherwise provided in subsections (4)-(7),
79records a notice of lien in the office of the clerk of the
80circuit court of the county in which the property is located
81prior to the actual conveyance or transfer of the commercial
82real estate against which the broker is claiming the lien.
83     (b)  The lien shall attach as of the date of the recording
84of the notice of lien and shall not relate back to the date of
85the written instrument.
86     (c)  A broker shall not have the right under this chapter
87to a lien for commission or other compensation owed to that
88broker pursuant to a sublease or assignment of lease. The
89provisions of this paragraph do not limit or otherwise affect
90the claims or defenses a broker or any other party may have on
91any other basis, in law or in equity.
92     (3)  CONTENTS OF NOTICE OF LIEN.--A notice of lien shall
93state the name of the claimant, the name of the owner of record
94of the commercial real estate, a description of the property
95upon which the lien is being claimed, the amount for which the
96lien is claimed, and the real estate license number of the
97broker. The notice of lien shall recite that the information
98contained in the notice is true and accurate to the knowledge of
99the signator. The notice of lien must be signed by the broker or
100a person authorized to sign on behalf of the broker and must be
101notarized.
102     (4)  COMMISSION DUE IN INSTALLMENTS.--Except as otherwise
103provided in subsections (5)-(7), when payment to a broker is due
104in installments, a portion of which is due only after the
105conveyance or transfer of the commercial real estate, any notice
106of lien for those payments due after the conveyance or transfer
107may be recorded at any time subsequent to the conveyance or
108transfer of the commercial real estate but not later than 90
109days after the date the payment is due. A notice of lien
110recorded prior to conveyance or transfer of the commercial real
111estate claiming all moneys due under an installment payment
112agreement or for future commissions as described in subsection
113(6) shall be valid and enforceable only to the extent it
114pertains to payments due from the transferee to the transferor
115after conveyance or transfer. As payments or partial payments of
116commission are received, a broker shall provide partial releases
117therefor, thereby reducing the amount due the broker under the
118broker's notice of lien.
119     (5)  LEASE OF COMMERCIAL REAL ESTATE.--In the case of a
120lease, a notice of lien must be recorded no later than 90 days
121after the transferee takes possession of the leased premises.
122However, if a transferor personally serves written notice of the
123intended execution of the lease on a broker entitled to claim a
124lien, at least 10 days prior to the date of the intended
125execution of the lease, a notice of lien must be recorded before
126the date indicated in such notice for the execution of the
127lease. The lien shall attach as of the date of the recording of
128the notice of lien and shall not relate back to the date of the
129written instrument.
130     (6)  FUTURE COMMISSION.--If a broker may be due future
131commissions pursuant to a written instrument signed by the then
132transferor or transferee, the broker may record a notice of lien
133at any time after execution of the lease or other written
134instrument which contains such option or options, but may not
135record the notice of lien later than 90 days after the event or
136occurrence on which the claimed future commission occurs.
137Notwithstanding subsection (10), an action to enforce a lien
138under this subsection must be commenced within 2 years after the
139occurrence or transaction on which the future commission is
140claimed.
141     (7)  REAL ESTATE SOLD BEFORE COMMISSION DUE.--In the event
142that the commercial real estate is sold or otherwise conveyed
143prior to the date on which either a future commission or an
144unpaid installment of a commission is due, if the broker has
145recorded a valid notice of lien prior to the sale or other
146conveyance of the real estate, then the purchaser or transferee
147shall be deemed to have notice of and shall take title to the
148real estate subject to the lien. However, if a broker claiming a
149future commission fails to record a notice of lien for future
150commission prior to the recording of a deed conveying legal
151title to the real estate to the transferee, then such broker may
152not claim a lien on the real estate. The provisions of this
153subsection do not limit or otherwise affect claims or defenses a
154broker or any other party may have on any other basis, in law or
155in equity.
156     (8)  WRITTEN INSTRUMENT WITH TRANSFEREE.--If a transferee
157has executed a written instrument in accordance with subsection
158(1), then a lien shall attach to the transferee's interest upon
159the transferee purchasing or otherwise accepting conveyance or
160transfer of the commercial real estate and the recording of a
161notice of lien by the broker in the office of the clerk of the
162circuit court of the county in which the property is located,
163within 90 days after the purchase or other conveyance or
164transfer to the transferee. The lien shall attach as of the date
165of the recording of the notice of lien and shall not relate back
166to the date of the written instrument.
167     (9)  SERVICE OF NOTICE OF LIEN.--A broker shall, within 10
168days after recording a notice of lien, personally deliver or
169mail, by registered or certified mail, a copy of the notice of
170lien to the owner of record of the commercial real estate or the
171duly authorized agent of the owner of record at the address of
172the owner of record as stated in the written instrument on which
173the claim for lien is based or, if no such address is given, to
174the address of the property on which the claim of lien is based.
175Mailing of the copy of the notice of lien is effective when
176deposited in the United States mail with postage prepaid. A
177broker's lien on commercial real estate shall be unenforceable
178if delivery or mailing of the copy of notice of lien does not
179occur within the time period and in the manner required by this
180subsection.
181     (10)  LAWSUIT TO ENFORCE LIEN.--
182     (a)  A broker may bring suit to enforce a lien on
183commercial real estate in the circuit court in the county in
184which the property is located by filing a complaint and sworn
185affidavit that the notice of lien has been recorded.
186     (b)  A broker claiming a lien on commercial real estate
187shall, within 2 years after recording the notice of lien,
188commence proceedings by filing a complaint. Failure to commence
189proceedings within 2 years after recording the notice of lien
190shall extinguish the lien. No subsequent notice of lien may be
191given for the same claim, nor may that claim be asserted in any
192proceedings under this chapter.
193     (c)  A broker claiming a lien on commercial real estate
194based upon an option or other right to purchase or lease shall,
195within 2 years after the conveyance or transfer of the real
196estate under the exercise of the option to purchase or lease,
197commence proceedings by filing a complaint. Failure to commence
198proceedings within this time period shall extinguish the lien.
199No subsequent notice of lien may be given for the same claim,
200nor may that claim be asserted in any proceedings under this
201chapter.
202     (d)  A complaint under this section shall contain a brief
203statement of the contract or instrument on which the lien is
204based as well as its effective date, a description of the
205services performed, the amount due and unpaid, a description of
206the property that is subject to the lien, and other facts
207necessary for a full understanding of the rights of the parties.
208The plaintiff shall make all interested parties of whose
209interest the plaintiff is notified or has knowledge defendants
210to the action and shall issue summons and provide service as in
211other civil actions filed in this state. When any defendant
212resides or has gone out of the state, or on inquiry cannot be
213found, or is concealed within the state so that process cannot
214be served on the defendant, the plaintiff shall cause a notice
215to be given to the defendant or cause a copy of the complaint to
216be served on the defendant in the manner and on the same
217conditions as in other civil actions filed in this state.
218Failure of the plaintiff to provide proper summons or notice to
219the defendant as required by this paragraph shall be grounds for
220judgment against the plaintiff and in favor of the defendant
221with prejudice. All liens claimed under this chapter shall be
222foreclosed in the manner of foreclosing a mortgage under the
223provisions of chapter 702.
224     (11)  DEMAND TO INITIATE OR FILE ANSWER TO LAWSUIT.--Upon
225written demand of the owner of record or a lienee of the
226commercial real estate, or a duly authorized agent of the owner
227or lienee, served on the broker claiming the lien to require
228suit to be commenced to enforce the lien or an answer to be
229filed in a pending suit to enforce the lien, the suit must be
230commenced or the answer filed within 30 days thereafter or the
231lien shall be extinguished. Service of such written demand may
232be made by registered or certified mail, return receipt
233requested, or by personal service.
234     (12)  SATISFACTION OR RELEASE OF LIEN.--
235     (a)  Whenever a notice of lien on commercial real estate
236has been recorded with the clerk of the circuit court and the
237claimed commission has been paid to a broker claiming a lien on
238the property, or when there is a failure to initiate a suit to
239enforce the lien within the time period provided by this
240section, the broker shall acknowledge satisfaction or release of
241the lien in writing, upon written demand of the owner of the
242commercial real estate, within 5 days after payment of the
243amount claimed or within 5 days after expiration of the time
244period in which the complaint to initiate the lawsuit was to be
245filed.
246     (b)  Whenever a notice of lien on commercial real estate
247has been recorded with the clerk of the circuit court and a
248condition occurs that would preclude a broker from receiving
249compensation under the terms of the written agreement on which
250the lien is based, the broker shall provide to the owner of
251record, within 10 days following written demand by the owner of
252record, a written release or satisfaction of the lien.
253     (13)  ALTERNATIVE DISPUTE RESOLUTION.--If the broker and
254the party or parties from whom the commission is claimed agree
255to alternative dispute resolution, the claim shall be heard and
256resolved in the forum on which these parties have agreed. The
257court before which the action to enforce the lien is brought
258shall retain jurisdiction to enter judgment on the award or
259other result made or reached in alternative dispute resolution
260on all parties to the action to enforce the lien. The broker's
261notice of lien shall remain of record and the action to enforce
262the lien shall be stayed during the pendency of the alternative
263dispute resolution process.
264     (14)  ASSESSMENT OF COSTS, FEES, AND INTEREST.--The cost of
265proceedings brought under this section, including reasonable
266attorney's fees, costs, and prejudgment interest due to the
267prevailing party, shall be borne by the nonprevailing party or
268parties. When more than one party is responsible for costs,
269fees, and prejudgment interest, the costs, fees, and prejudgment
270interest shall be equitably apportioned by the court or
271alternative dispute resolution tribunal among the responsible
272parties.
273     (15)  WAIVER OF LIEN RIGHTS VOID.--Except for a
274satisfaction or release of lien provided in consideration of
275payment of the fee or commission claimed by a broker or other
276consideration acceptable to the broker or pursuant to subsection
277(12), any waiver of a broker's right to a lien on commercial
278real estate under this section and any other waiver or release
279of such a lien is void.
280     714.007  Priority of other recorded liens, mortgages, and
281encumbrances.--Valid prior recorded liens, mortgages, and other
282encumbrances shall have priority over a broker's lien under this
283chapter. Such prior recorded liens, mortgages, and encumbrances
284shall include, without limitation:
285     (1)  Any valid mechanic's lien claim that is recorded
286subsequent to the broker's notice of lien but which relates back
287to a date prior to the recording date of the broker's notice of
288lien.
289     (2)  Prior recorded liens securing revolving credit and
290future advances of construction loans.
291     714.009  Escrow of disputed amounts.--Except as otherwise
292provided in this chapter, whenever a notice of lien on
293commercial real estate has been filed with the clerk of the
294circuit court that would prevent the closing of a transaction or
295conveyance, an escrow account shall be established from the
296proceeds from the transaction or conveyance, or other collateral
297or security, in an amount sufficient to release the lien. The
298requirement to establish an escrow account as provided in this
299section shall not be cause for any party to refuse to close the
300transaction or conveyance. The moneys or other collateral or
301security required to be held in escrow under this section shall
302be held until the rights of the parties to the escrowed moneys
303or other collateral or security have been determined by written
304agreement of the parties, by a court of law, or by any other
305process that may be agreed to by the parties for resolution of
306their dispute. Upon the escrow of funds or other collateral or
307security in the amount claimed in the lien, the lien and notice
308of lien shall be automatically dissolved. Upon release of the
309lien by the broker, the broker shall be deemed to have an
310equitable lien on the escrow funds or other collateral or
311security pending a resolution of the broker's claim, and the
312escrow shall not be released until a resolution is reached and
313agreed to by all necessary parties or ordered by a court. The
314parties are not required to follow the escrow procedure in this
315section if alternative procedures that would allow the
316transaction to close are available and are acceptable to the
317transferee in the transaction. If the proceeds from the
318transaction are insufficient to release all liens claimed
319against the commercial real estate, including the broker's lien,
320then the parties are not required to follow the escrow procedure
321in this section.
322     Section 2.  Paragraph (j) of subsection (1) of section
323475.42, Florida Statutes, is amended to read:
324     475.42  Violations and penalties.--
325     (1)  VIOLATIONS.--
326     (j)  A broker or sales associate may not place, or cause to
327be placed, upon the public records of any county, any contract,
328assignment, deed, will, mortgage, affidavit, or other writing
329which purports to affect the title of, or encumber, any real
330property if the same is known to her or him to be false, void,
331or not authorized to be placed of record, or not executed in the
332form entitling it to be recorded, or the execution or recording
333whereof has not been authorized by the owner of the property,
334maliciously or for the purpose of collecting a commission, or to
335coerce the payment of money to the broker or sales associate or
336other person, or for any unlawful purpose. However, nothing in
337this paragraph shall be construed to prohibit a broker or a
338sales associate from recording a judgment rendered by a court of
339this state or to prohibit a broker from placing a lien on a
340property where expressly permitted by contractual agreement or
341otherwise allowed by law.
342     Section 3.  This act shall take effect July 1, 2005.


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