New Bill Would Create "Commercial Real Estate Broker's Lien Act"

On May 14, 2008, Sen. Randy Richardville (R. Monroe) introduced S.B. 1313, which would create the "Commercial Real Estate Broker's Lien Act". The bill was reported out of committee on October 2, 2008.

The bill would do all of the following:

• Specify circumstances under which a commercial real estate broker's lien would attach to commercial real estate.
  

• Require a claim of lien to be recorded before conveyance unless the broker's commission was due in installments and at least one was due after conveyance.

• Provide for the recording and attachment of a lien in the case of a lease agreement, a broker's acting as a buyer's agent, or a commission owed on a purchase option.

• Specify information that would have to be included in a claim of lien.

• Provide that a prior-recorded lien or mortgage would have priority over a commercial real estate broker's lien.

• Require the establishment of an escrow account if a lien recorded under the proposed Act would prevent a closing transaction.

• Authorize a person claiming a commercial real estate broker's lien to bring an action to enforce it in circuit court.

• Allow an owner of commercial real estate to serve on a lien holder a demand to enforce the lien or answer a claim; and provide that the lien would be extinguished if the lien holder did not respond within 30 days.

• Specify that a lien under the Act would be available only to a licensed real estate broker.

A commercial real estate broker's lien would attach to commercial real estate in favor of a real estate broker if all of the following circumstances existed:

• The real estate broker had a written commission agreement.

• The broker was entitled to a commission under that agreement.

• The broker recorded a claim of lien before the actual conveyance of the commercial real estate.

To track the progress of S.B. 1313, click here. 

Update: S.B. 1313 died, but a similar bill was introduced on May 27, 2009, S.B. 610, that would also create a lien statute for commercial real estate brokers.  

On October 5, 2010, S.B. 610 was signed into law by Governor Granholm as PA 201 of 2010. The new law is effective immediately.