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Report for Palm Beach Real Estate Professionals©
Broker's Lien for Real Estate Commission Under the Florida Commercial Real Estate Sales Commission Lien Act.
You have a listing agreement for a commercial property. You find a buyer- he says he wants the property, then he says he doesn't. The next thing you hear is that the transaction is set for closing in a couple of days and you and your listing agreement have been left in the dust.
Or have you?
You haven't. For sales of commercial property, Florida Statutes provide:
475.703 Broker's lien for sales commission.--
(1) A broker has a lien upon the owner's net proceeds from the disposition of commercial real estate for any commission earned by the broker with respect to that disposition pursuant to a brokerage agreement. The lien upon the owner's net proceeds pursuant to this part for a broker's commission is a lien upon personal property, attaches to the owner's net proceeds only, and does not attach to any interest in real property.
The commission needs to have been ‘earned' per the statute and the listing agreement and the broker must have disclosed to the owner when the brokerage agreement was executed that the statute creates lien rights that are not waivable. A disclosure in substantially the following form is deemed sufficient per the statute:
The Florida Commercial Real Estate Sales Commission Lien Act provides that when a broker has earned a commission by performing licensed services under a brokerage agreement with you, the broker may claim a lien against your net sales proceeds for the broker's commission. The broker's lien rights under the act cannot be waived before the commission is earned.
The statute then provides that the broker give a statutory notice of the claim for commission, in form and per the requirements of the statute. When this is done, a lien is created against the seller's proceeds (not against the commercial real estate). The good news here is that the closing agent is obligated, upon proper notice, to reserve from the owner's net proceeds an amount equal to the commission claimed by the broker in the commission notice.
For a full description of the application of the statute, or if we can assist you or your clients in matters regarding Florida real estate, give us a call.