Delaware Enacts Commercial Brokers’ Lien Law

governor ceremonial bill signing one okay (Large)

In April, the Delaware legislature passed the “Commercial Real Estate Brokers’ Lien Act.” Pictured behind Governor Jack Markell are the Delware REALTOR® team at the bill signing ceremony this week.  The Act is a victory for commercial brokers and managers, putting into law the right to recover unpaid compensation for managing, selling or purchasing commercial real estate. Well done, First State!

The “Lien Act” or the “Brokers’ Lien Act” applies to real estate “ Brokers” who hold a broker license from the Delaware Real Estate Commission with respect to the sale or rental of real estate in the State of Delaware. The Act applies to Brokerage “Agreements,” which means any written agreement for the payment for brokerage services of a broker for the management, sale, purchase, lease or other conveyance or acquisition of commercial real estate. Commercial real estate does not include single family residential units such as residential condominiums, townhomes and mobile homes.

The Act provides the broker with the right to place a lien upon commercial real estate that is the subject of a brokerage agreement for the unpaid amount of compensation due the broker as stated in the brokerage agreement, provided that the brokerage agreement expressly states the following:

  1. The amount or the method of calculating the amount of compensation for the services of the broker; and
  2. That the brokerage agreement is a binding contract under state law; and
  3. The identity of the real estate that is covered by the brokerage agreement by description and/or tax parcel number.

Section 26.04 of the Act provides that the brokers’ lien shall attach to the commercial real estate upon the broker filing an Affidavit and Notice of Brokers’ Lien in the form required by the office of the Recorder of Deeds in the county where the commercial real estate is located. The broker must then, within 10 days, cause a copy to be served upon the person or entity charged by certified mail, return receipt requested or process server. The Affidavit and Notice of Brokers’ Lien may only be filed by an attorney admitted to the Bar of the Supreme Court of the State of Delaware.

 

 

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12. June 2013 by Wayne Grohl
Categories: Advocacy | Tags: , , , , , , , | 4 comments

Comments (4)

  1. It is about time that a state step out front and declare that there are now legal remedies for hard working brokers that did not get paid for work that they completed other than the tedious and often unpredictable small claims court process.

  2. Allowing commercial brokers to place liens seems to make sense as it will give a remedy to those that are cheated out of their sweat equity. However, like any remedy, it can be abused. It is interesting here that the lien can only be filed by a licensed attorney, which appears to be an attempt to reduce any possibility of abuse of the lien power. However, that provision may bring its own problems. In any event, the industry will see how it plays out and legislators in other states may be watching.

    • Thanks for the comment, George. I take it from what you’ve said that some states accept broker liens from non-attorneys. Do you know which ones and can you discuss how a lien could be abused?

      Thanks,

      WG

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