GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 923

Short Title:  Commercial Realtor Lien Act.	(Public)

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Sponsors: Senators Odom; Allran, Carpenter, and Foxx.

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Referred to:  Judiciary.

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April 17, 1997

A BILL TO BE ENTITLED
ACT TO CREATE LIENS FOR FEES TO BE PAID TO COMMERCIAL REAL ESTATE BROKERS.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 93A is amended by adding a new Article to read:
"ARTICLE 6.
"Commercial Real Estate Brokers' Lien Act.
"§ 93A-90.  Short title.
This Article may be known as the 'Commercial Real Estate Brokers' Lien Act.'
"§ 93A-91.  Definitions.
As used in this Article, the following terms mean:
(1)	'Commercial real estate', any real estate other than real estate containing one to four residential units, real estate on which no buildings or structures are located, or real estate classified as agricultural and horticultural property for tax assessment purposes.  Commercial real estate does not include single-family residential units including condominiums, townhouses, or homes in a subdivision when that real estate is sold, leased, or otherwise conveyed on a unit-by-unit basis even though the units may be part of a larger building or parcel of real estate containing more than four residential units;
(2)	'Owner', the owner of record of commercial real estate;
(3)	'Real estate broker' and 'real estate salesperson', as such terms are defined in G.S. 93A-2.
"§ 93A-92.  Broker's lien for compensation.
Any licensed real estate broker shall have a lien, upon commercial real estate or any interest in that commercial real estate, in the amount that the real estate broker is due:
(1)	Under a written instrument signed by the owner of an interest in the commercial real estate or signed by the owner's duly authorized agent; or
(2)	Under a written instrument signed by a prospective buyer or prospective tenants or signed by their duly authorized agent as to the purchase, lease, or other conveyance to the buyer or tenant of an interest in the commercial real estate.
"§ 93A-93.   Lien notice, content.  
A lien notice, for purposes of this Article, shall state:
(1)	The name of the claimant;
(2)	The name of the owner;
(3)	A description of the property upon which the lien is being claimed;
(4)	The amount for which the lien is claimed; and
(5)	The real estate license number of the real estate broker.
The notice of lien shall be signed by the real estate broker, and the broker shall attest that the information contained in the notice is true and accurate as to his knowledge and belief.
"§ 93A-94.  When broker's lien attaches to commercial real estate.
A real estate broker's lien authorized by this Article attaches to the commercial real estate, or an interest in the commercial real estate, when the real estate broker records a notice of the lien in the office of the register of deeds of the county in which the real property, or any interest in the real property is located, if such lien is filed prior to the actual conveyance or transfer of the commercial real estate subject to such real estate broker's lien, except that:
(1)	If payment to a real estate broker is due in installments and a portion of the payment is due after the conveyance or transfer of the commercial real estate, any claim for a lien for installment payments due after the transfer or conveyance of the real estate may be recorded any time after the transfer or conveyance of the commercial real estate but shall be recorded before the date on which the payment is due.  This lien shall only be effective as a lien against the commercial real estate to the extent moneys are still owed to the transferor by the transferee.  A single claim for a lien recorded before the transfer or conveyance of the commercial real estate, claiming all moneys due under an installment payment agreement, is not valid or enforceable to the extent of the payments due after the transfer or conveyance.  The lien attaches for purposes of this paragraph when the claim for lien is recorded;
(2)	In the case of a lease, the claim for lien shall be recorded within 90 days after the tenant takes possession of the leased property, unless written notice of the intention to sign the lease is personally served on the real estate broker entitled to claim a lien at least 10 days before the date of the intended signing of the lease, then the claim for lien shall be recorded before the date indicated for the signing of the lease.  The lien attaches for purposes of this subdivision when the claim for lien is recorded; or
(3)	If the real estate broker has a written agreement with a prospective buyer as provided in subdivision (2) of G.S. 93A-92, then the lien attaches when the prospective buyer purchases or otherwise accepts a conveyance or transfer of the commercial real estate and records a notice of the lien within 90 days after the purchase or other conveyance or transfer to the buyer in the office of the register of deeds in the county in which the commercial real estate, or any interest in the commercial real estate, is located.
"§ 93A-95.  When lien claim release or satisfaction to be filed.
If a claim for a lien has been filed with the register of deeds and a condition occurs that would preclude the broker from receiving compensation under the terms of the real estate broker's written agreement, the real estate broker shall record and provide the owner of record a written release or satisfaction of the lien.
"§ 93A-96.  Broker to mail copy of notice of lien to owner by certified mail.
Any real estate broker who attaches a lien on commercial property pursuant to the provisions of this Article shall mail a copy of the notice of the lien to the owner of the commercial real estate by certified mail.  The real estate broker's lien is void if the broker does not record the lien as provided in this Article.
"§ 93A-97.  Enforcing lien.
A real estate broker may bring suit to enforce a lien which attaches pursuant to the provisions of this Article in any court of competent jurisdiction in the county where the property is located by filing a verified petition that the lien has been recorded.  Unless the claim is based upon an option to purchase the commercial real estate, the broker claiming the lien shall commence proceedings within six months after recording the lien and failure to commence proceedings within the six months shall extinguish the lien.  A claim for the same lien, extinguished pursuant to this section and G.S. 93A-99, may not be asserted in any subsequent proceeding.
"§ 93A-98.  Petition, content, parties' foreclosure action, procedure.
(a)	A petition filed pursuant to the provisions of this section and G.S. 93A-97 shall contain:
(1)	A statement of the terms of the contract or agreement on which the lien is based;
(2)	The date when the contract or agreement was made;
(3)	A description of the services performed;
(4)	The amount due and unpaid;
(5)	A description of the property that is subject to the lien; and
(6)	Any other facts necessary for a full understanding of the rights of the parties.
The plaintiff shall file the action against all known parties who have an interest in the real estate.  A foreclosure action for a lien claimed pursuant to this Article shall be brought pursuant to the provisions of Article 1 of Chapter 44A of the General Statutes.
(b)	Valid prior recorded liens or mortgages shall have priority over a real estate broker's lien.
"§ 93A-99.  Lien extinguished for broker failing to file suit or answer in pending suit within 30 days after service on owner.
If a broker claiming a lien pursuant to this Article fails to file a suit to enforce the lien or fails to file an answer in a pending suit to enforce a lien within 30 days after a properly served written demand of the owner, lienee, or other authorized agent, the lien shall be extinguished.  Service of the demand shall be by registered or certified mail, return receipt requested, or by personal service.  The provisions of this section shall not extend any other deadline provided by law or the filing of any pleadings or for the foreclosure of any lien governed by this Article.
"§ 93A-100.  Satisfaction or release of lien.
If a claim for lien has been filed pursuant to the provisions of this Article with the register of deeds and the claim has been paid in full or if the lienor fails to institute a suit to enforce the lien within the time as provided by law, the real estate broker shall acknowledge satisfaction or release of the lien in writing  upon written demand of the owner within 30 days after the demand.
"§ 93A-101.  Cost of proceeding to be paid by nonprevailing party.
The costs of any proceeding brought to enforce a lien filed pursuant to this Article, including reasonable attorneys' fees and prejudgment interest due to the prevailing party, shall be paid by the nonprevailing party or parties.  If more than one party is responsible for costs, fees and prejudgment interest, the costs, fees and prejudgment interest shall be equitably apportioned by the court among the responsible parties.
"§ 93A-102.  Escrow account.
Unless an alternative procedure is available and is acceptable to the transferee in a real estate transaction, if a claim for a real estate broker's lien has been filed with the register of deeds and that lien would prevent the closing of a transaction or conveyance, an escrow account shall be established with the clerk of the superior court in the county in which the commercial real estate is located from the proceeds of the transaction or conveyance in an amount sufficient to release the claim for the lien.  The requirement to establish an escrow account, as provided in this section, shall not be cause for any party to refuse to close a transaction.  The proceeds held in that escrow account shall be held by the clerk until the parties' rights to the escrowed funds have been determined by:
(1)	Written agreement of the parties;
(2)	A final judgment of the court of competent jurisdiction; or
(3)	Other process as may be agreed to by the parties.
If funds sufficient to satisfy the amount claimed in the lien have been deposited in the escrow account, the real estate broker shall release the claim for the lien on the real estate.
"§ 93A-103.  Broker to give written notice of right to lien on premises at time of closing.
Any real estate broker who proposes to assert a lien pursuant to this Article shall be prohibited from asserting the lien unless, at the time of the closing for the transaction, the broker has given written notice to the purchaser of the commercial real estate that payment of the broker's fee is due and that he or she is entitled to a lien on the premises."
Section 2.  This act becomes effective December 1, 1997.