By Brimer, Reyna of Bexar, Keel                       H.B. No. 1052
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to creating a real estate broker's and appraiser's lien on
 1-3     commercial real estate; providing a penalty.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subtitle B, Title 5, Property Code, is amended by
 1-6     adding Chapter 62 to read as follows:
 1-7          CHAPTER 62.  BROKER'S AND APPRAISER'S LIEN ON COMMERCIAL
 1-8                                 REAL ESTATE
 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS
1-10           Sec. 62.001.  SHORT TITLE.  This chapter may be cited as the
1-11     Broker's and Appraiser's Lien on Commercial Real Estate Act.
1-12           Sec. 62.002.  APPLICABILITY.  This chapter applies only to
1-13     real estate that is commercial real estate on the date the notice
1-14     of lien is filed under this chapter.  To reduce the potential
1-15     adverse impact on small businesses, this chapter does not apply to
1-16     commercial property that:
1-17                 (1)  is the property owner's primary place of business
1-18     or contains fewer than five tenants; and
1-19                 (2)  is less than 10,000 gross commercial square feet
1-20     or less than 20,000 gross industrial square feet.
1-21           Sec. 62.003.  DEFINITIONS.  In this chapter:
1-22                 (1)  "Broker" means a person who:
1-23                       (A)  is licensed as a real estate broker under
1-24     The Real Estate License Act (Article 6573a, Vernon's Texas Civil
 2-1     Statutes) and is not acting as a residential rental locator as
 2-2     defined by Section 24, The Real Estate License Act (Article 6573a,
 2-3     Vernon's Texas Civil Statutes); or
 2-4                       (B)  is licensed or certified as a real estate
 2-5     appraiser under the Texas Appraiser Licensing and Certification Act
 2-6     (Article 6573a.2, Vernon's Texas Civil Statutes).
 2-7                 (2)  "Commercial real estate" means all real estate
 2-8     except:
 2-9                       (A)  real estate improved with one to four
2-10     residential units;
2-11                       (B)  a single-family residential unit, including
2-12     a condominium, townhouse, or home in a subdivision, if the unit is
2-13     sold, leased, or otherwise conveyed on a unit-by-unit basis and
2-14     regardless of whether the unit is part of a larger building or
2-15     located on real estate containing more than four residential units;
2-16                       (C)  real estate that is a person's homestead;
2-17                       (D)  real estate that is not improved with a
2-18     structure and is:
2-19                             (i)  zoned for single-family residential
2-20     use; or
2-21                             (ii)  restricted for single-family use
2-22     under restrictive covenants that will remain in effect for at least
2-23     the next two years; or
2-24                       (E)  real estate that is primarily used for and
2-25     will continue to be used for farming or ranching.
2-26                 (3)  "Commission" includes a fee or other valuable
2-27     consideration.
 3-1                 (4)  "Commission agreement" means a written instrument
 3-2     that:
 3-3                       (A)  entitles a broker to a commission;
 3-4                       (B)  is signed by the broker or the broker's
 3-5     authorized agent and the person obligated to pay the commission or
 3-6     that person's authorized agent;
 3-7                       (C)  references the commission amount or
 3-8     describes the formula used to determine the commission amount; and
 3-9                       (D)  contains a description legally sufficient
3-10     for identification of the real estate interest that is the subject
3-11     of the agreement if the person obligated to pay the commission is a
3-12     seller or lessor.
3-13                 (5)  "Deferred commission" means a commission that is
3-14     earned and is not yet payable.
3-15                 (6)  "Real estate" has the meaning assigned by Section
3-16     2, The Real Estate License Act (Article 6573a, Vernon's Texas Civil
3-17     Statutes).
3-18           Sec. 62.004.  PAYABLE COMMISSION AND EARNED COMMISSION.  (a)
3-19     A commission is payable at the time provided in the commission
3-20     agreement.  If payment of the commission is conditioned on the
3-21     occurrence of an event and that event does not occur, the person
3-22     obligated to pay the commission is not required to pay the
3-23     commission.
3-24           (b)  Except as provided by Subsection (c), a commission is
3-25     earned on the earlier of the date that:
3-26                 (1)  the event described by the commission agreement
3-27     occurs; or
 4-1                 (2)  the person obligated to pay the commission enters
 4-2     into a purchase contract or a lease during the period prescribed by
 4-3     the commission agreement for all or part of the commercial real
 4-4     estate.
 4-5           (c)  If a broker has earned a commission under a commission
 4-6     agreement relating to a lease transaction and the commission
 4-7     agreement provides that the broker may receive an additional
 4-8     commission when the lease is modified to expand the lease space or
 4-9     renewed, the additional commission is earned when:
4-10                 (1)  the broker performs all the additional services
4-11     relating to the lease modification or renewal expressly prescribed
4-12     by the commission agreement; or
4-13                 (2)  the broker first earned a commission under the
4-14     commission agreement if the commission agreement does not expressly
4-15     require the broker to perform additional services relating to a
4-16     lease modification or renewal.
4-17           Sec. 62.005.  BROKER'S ADDRESS FOR RECEIPT OF NOTICE.  A
4-18     seller, lessor, buyer, or tenant shall send any notice required to
4-19     be sent to the broker under this chapter to the broker at:
4-20                 (1)  the broker's last known address as reflected in
4-21     the person's records; and
4-22                 (2)  the broker's address as reflected in the records
4-23     of the Texas Real Estate Commission.
4-24               (Sections 62.006-62.020 reserved for expansion)
4-25                        SUBCHAPTER B.  BROKER'S LIEN
4-26           Sec. 62.021.  PERSON ENTITLED TO LIEN.  (a)  A broker has a
4-27     lien on a seller's or lessor's commercial real estate interest in
 5-1     the amount specified by the commission agreement if:
 5-2                 (1)  the broker has earned a commission under a
 5-3     commission agreement signed by the seller or lessor of the
 5-4     commercial real estate interest or the seller's or lessor's
 5-5     authorized agent; and
 5-6                 (2)  a notice of lien is recorded and indexed as
 5-7     provided by Section 62.024.
 5-8           (b)  A broker has a lien on the commercial real estate
 5-9     interest purchased by a prospective buyer in the amount specified
5-10     by the commission agreement if:
5-11                 (1)  the broker has earned a commission under a
5-12     commission agreement signed by the prospective buyer of the
5-13     commercial real estate interest or the prospective buyer's
5-14     authorized agent; and
5-15                 (2)  a notice of lien is recorded and indexed as
5-16     provided by Section 62.024.
5-17           (c)  A broker has a lien on the prospective tenant's
5-18     leasehold interest in commercial real estate in the amount
5-19     specified by the commission agreement if:
5-20                 (1)  the broker has earned a commission under a
5-21     commission agreement signed by the prospective tenant of the
5-22     commercial real estate interest or the prospective tenant's
5-23     authorized agent; and
5-24                 (2)  a notice of lien is recorded and indexed as
5-25     provided by Section 62.024.
5-26           (d)  A lien described by this section is available only to
5-27     the broker named in the commission agreement.  The lien is not
 6-1     available to an employee or independent contractor of the broker.
 6-2           (e)  The broker's right to claim a lien based on the
 6-3     commission agreement must be disclosed in the commission agreement.
 6-4           Sec. 62.022.  WAIVER, RELEASE, OR DISCHARGE OF LIEN;
 6-5     ASSUMPTION OF COMMISSION OBLIGATION.  (a)  Except as provided by
 6-6     Subsection (b), the waiver of a broker's right to a lien under this
 6-7     chapter, or a release given for the purpose of releasing the
 6-8     broker's lien before the commission is satisfied or forgiven, is
 6-9     void.
6-10           (b)  A broker's entitlement to a lien on the interest of an
6-11     owner or tenant in commercial real estate shall be automatically
6-12     waived if:
6-13                 (1)  the commission is earned and payable for services
6-14     provided relating to a lease transaction; and
6-15                 (2)  the commission agreement is included as a
6-16     provision of the lease agreement.
6-17           (c)  A lien under this chapter is discharged by:
6-18                 (1)  a court order discharging the lien;
6-19                 (2)  paying the commission to the broker named in the
6-20     commission agreement; or
6-21                 (3)  establishing an escrow account described by
6-22     Subchapter F.
6-23           (d)  A person who assumes an owner's or tenant's commercial
6-24     real estate interest is bound by a commission agreement included in
6-25     a lease agreement unless an escrow account is established under
6-26     Subchapter F or a bond is provided under Subchapter G.
6-27           (e)  This section does not affect the rights of a mortgagee
 7-1     who forecloses on commercial real estate and does not assume the
 7-2     lease on which a commission agreement is based.
 7-3           Sec. 62.023.  AFFIDAVIT IDENTIFYING BROKER.  If requested by
 7-4     the buyer, the buyer's authorized agent, or the escrow agent for
 7-5     the commercial real estate transaction, the seller of commercial
 7-6     real estate and the broker representing the seller shall provide to
 7-7     the requesting party before the closing of the transaction a
 7-8     written affidavit identifying each broker with whom the affiant
 7-9     knows or believes the seller or the seller's authorized agent has
7-10     signed a commission agreement.
7-11           Sec. 62.024.  FILING OF NOTICE OF LIEN.  (a)  A broker
7-12     claiming a lien under this chapter may not file a notice of lien
7-13     unless the commission on which the lien is based is earned.
7-14           (b)  A broker claiming a lien under this chapter must file a
7-15     notice of lien as provided by Subchapter C with the county clerk of
7-16     the county in which the commercial real estate is located.
7-17           (c)  The county clerk shall record the notice of lien in
7-18     records kept for that purpose and shall index and cross-index the
7-19     notice of lien in the names of the broker, each person obligated to
7-20     pay the commission under the commission agreement, and each person
7-21     who has an interest in the commercial real estate if the broker
7-22     claims a lien on that interest.
7-23           Sec. 62.025.  CONTENTS OF NOTICE OF LIEN.  The notice of lien
7-24     must be signed by the broker or by a person authorized to sign on
7-25     behalf of the broker and must contain the following:
7-26                 (1)  a sworn statement of the nature and amount of the
7-27     claim, including:
 8-1                       (A)  the commission amount or the formula used to
 8-2     determine the commission;
 8-3                       (B)  the type of commission at issue, including a
 8-4     deferred commission; and
 8-5                       (C)  the month and year in which the commission
 8-6     was earned;
 8-7                 (2)  the name of the broker and the real estate license
 8-8     number of the broker;
 8-9                 (3)  the name as reflected in the broker's records of
8-10     any person who the broker believes is obligated to pay the
8-11     commission under the commission agreement;
8-12                 (4)  the name as reflected in the broker's records of
8-13     any person the broker believes to be an owner of the commercial
8-14     real estate interest on which the lien is claimed;
8-15                 (5)  a description legally sufficient for
8-16     identification of the commercial real estate interest sought to be
8-17     charged with the lien;
8-18                 (6)  the name of any broker or other person with whom
8-19     the broker intends to share the commission and the dollar or
8-20     percentage amount to be shared; and
8-21                 (7)  a copy of the commission agreement.
8-22           Sec. 62.026.  NOTICE OF FILING.  (a)  In this section,
8-23     "business day" means a day other than a Saturday, Sunday, or
8-24     holiday recognized by this state.
8-25           (b)  Not later than one business day after the date the
8-26     broker files a notice of lien, the broker shall mail a copy of the
8-27     notice of lien by certified mail, return receipt requested, or
 9-1     registered mail to:
 9-2                 (1)  the owner of record of the commercial real estate
 9-3     interest on which the lien is claimed or the owner's authorized
 9-4     agent; and
 9-5                 (2)  the prospective buyer or tenant and any escrow
 9-6     agent named in a contract for the sale or lease of the commercial
 9-7     real estate interest on which the lien is claimed if:
 9-8                       (A)  a binding written contract for the sale or
 9-9     lease of the commercial real estate interest is in effect between
9-10     the owner and the prospective buyer or tenant in a transaction that
9-11     is the basis for the commission; and
9-12                       (B)  the binding written contract was executed by
9-13     the owner and the prospective buyer or tenant before the date the
9-14     notice of lien is filed.
9-15           (c)  Service of the notice under Subsection (b) is complete
9-16     when the notice is deposited in the United States mail, postage
9-17     prepaid, and addressed to the persons entitled to receive the
9-18     notice under this section.
9-19           (d)  If the broker has actual knowledge of the identity of
9-20     the escrow agent named in the contract for the sale or lease of the
9-21     commercial real estate interest on which the broker claims a lien
9-22     or of the escrow agent otherwise closing the sale or lease of the
9-23     commercial real estate interest, the broker, before the first
9-24     business day before the date that the sale or lease is closed,
9-25     shall deliver a file-stamped copy or transmit a facsimile of a
9-26     file-stamped copy of the notice of lien to each escrow agent at the
9-27     office in which the closing of the sale or lease will occur for use
 10-1    during the closing of the sale or lease.  The broker shall deliver
 10-2    the copy or transmit the facsimile directly to the individual
 10-3    escrow agent responsible for closing the sale or lease if the
 10-4    broker knows that person's name.
 10-5          (e)  If the escrow agent receives the notice of lien, the
 10-6    escrow agent and other parties to the sale or lease may not close
 10-7    the transaction unless the lien is released, the funds are held in
 10-8    escrow as provided by Subchapter F, or a bond is filed as provided
 10-9    by Subchapter G.
10-10          (f)  If the broker fails to comply with this section, the
10-11    notice of lien is void.
10-12          Sec. 62.027.  INCEPTION OF BROKER'S LIEN.  (a)  A broker's
10-13    lien attaches to the commercial real estate interest owned by the
10-14    person obligated to pay the commission on the date the notice of
10-15    lien is recorded as provided by this chapter.  The lien does not
10-16    relate back to the date of the commission agreement.
10-17          (b)  A notice of lien for amounts earned by the broker under
10-18    an installment contract or under a commission agreement for a
10-19    deferred commission is enforceable only to the extent that the
10-20    installment or commission has become payable.
10-21          Sec. 62.028.  PRIORITY.  (a)  A recorded lien, mortgage, or
10-22    other encumbrance on commercial real estate, including a recorded
10-23    lien securing revolving credit and future advances for a loan,
10-24    recorded before the date a broker's lien is recorded has priority
10-25    over the broker's lien.
10-26          (b)  A broker's lien on the commercial real estate interest
10-27    of a person obligated to pay a commission is not valid or
 11-1    enforceable against a grantee, buyer, lessee, or transferee of the
 11-2    interest of the person obligated to pay the commission if the deed,
 11-3    lease, or instrument transferring the interest is recorded before
 11-4    the notice of the broker's lien is recorded.
 11-5          (c)  A purchase-money mortgage lien executed by the buyer of
 11-6    the commercial real estate interest has priority over a broker's
 11-7    lien claimed against the prospective buyer for the commission owed
 11-8    by that buyer.
 11-9          (d)  A mechanic's lien that is recorded after a broker's lien
11-10    and that relates back to a date before the date the broker's lien
11-11    is recorded has priority over the broker's lien.
11-12          Sec. 62.029.  SUBORDINATION.  (a)  If the person obligated to
11-13    pay the commission sells that person's commercial real estate
11-14    interest, the broker's lien is subordinate to a recorded
11-15    purchase-money first lien authorized by the buyer if the buyer:
11-16                (1)  executes and files with the county clerk of the
11-17    county in which the broker's lien is filed a memorandum that
11-18    evidences the buyer's ratification of the broker's lien and the
11-19    buyer's assumption of the obligation to pay the broker the
11-20    commission as provided by the commission agreement that is the
11-21    basis for the lien; and
11-22                (2)  sends the broker, by certified mail, return
11-23    receipt requested, or registered mail, a copy of the recorded
11-24    memorandum required by this subsection.
11-25          (b)  If the person obligated to pay the commission refinances
11-26    a recorded first lien secured by that person's commercial real
11-27    estate interest, the broker's lien is subordinate to the recorded
 12-1    refinanced first lien, regardless of the amount of the first lien
 12-2    after refinancing, if the person obligated to pay the commission:
 12-3                (1)  executes and files with the county clerk of the
 12-4    county in which the broker's lien is filed a memorandum that
 12-5    evidences the person's ratification of the broker's lien and the
 12-6    person's obligation to pay the broker the commission as provided by
 12-7    the commission agreement that is the basis for the lien; and
 12-8                (2)  sends the broker, by certified mail, return
 12-9    receipt requested, or registered mail, a copy of the recorded
12-10    memorandum required by this subsection.
12-11          (c)  If the person obligated to pay the commission obtains an
12-12    extension of credit secured by that person's commercial real estate
12-13    interest, the broker's lien is subordinate to the lien securing the
12-14    extension of credit if, according to the lien documents, the
12-15    extension of credit is made only for the purpose of:
12-16                (1)  repairing or renovating the commercial real
12-17    estate; or
12-18                (2)  completing construction or providing additional
12-19    improvements on the commercial real estate.
12-20          (d)  If the person obligated to pay the commission furnishes
12-21    a subordination agreement as provided by this section to be
12-22    executed by the broker, the broker must:
12-23                (1)  execute and acknowledge the subordination
12-24    agreement before a notary public; and
12-25                (2)  return the subordination agreement to the person
12-26    not later than the seventh day after the date the broker receives
12-27    the subordination agreement and other documents the broker
 13-1    reasonably requests in order to determine that the subordination
 13-2    agreement complies with this section.
 13-3          Sec. 62.030.  MIXED-USE REAL ESTATE.  If real estate is zoned
 13-4    or restricted for more than one use, the broker's lien attaches
 13-5    only to the portions of the real estate that constitute commercial
 13-6    real estate.
 13-7          Sec. 62.031.  CHANGE IN USE OF REAL ESTATE.  (a)  Except as
 13-8    provided by Subsection (b), any change in the use of the real
 13-9    estate does not affect a broker's lien if the notice of the lien
13-10    was filed when the real estate was commercial real estate.
13-11          (b)  The broker's lien is extinguished if:
13-12                (1)  not later than the 360th day after the date on
13-13    which the broker's commission is payable, the commercial real
13-14    estate interest on which a broker claims a lien is zoned for
13-15    single-family use or restricted for single-family use under
13-16    recorded restrictive covenants; and
13-17                (2)  the zoning ordinances or restrictive covenants for
13-18    single-family use are in effect until at least the second
13-19    anniversary of the date the commission is payable.
13-20              (Sections 62.032-62.040 reserved for expansion
13-21               SUBCHAPTER C.  TIME FOR FILING NOTICE OF LIEN
13-22          Sec. 62.041.  TIME TO FILE.  (a)  If a broker has earned a
13-23    commission under a commission agreement signed by a seller or the
13-24    seller's authorized agent, a broker must record a notice of lien:
13-25                (1)  after the commission is earned; and
13-26                (2)  before the conveyance of the commercial real
13-27    estate interest on which the broker is claiming a lien.
 14-1          (b)  If a broker has earned a commission under a commission
 14-2    agreement signed by a prospective buyer or a prospective buyer's
 14-3    authorized agent, the broker must record a notice of lien:
 14-4                (1)  after the buyer acquires legal title to the
 14-5    commercial real estate interest on which the broker is claiming a
 14-6    lien; and
 14-7                (2)  before the buyer conveys the buyer's commercial
 14-8    real estate interest on which the broker is claiming a lien.
 14-9          (c)  If the lien is based on a lease transaction, the broker
14-10    must record a notice of lien after the commission is earned and
14-11    before the earlier of:
14-12                (1)  the 91st day after the date the event for which
14-13    the commission becomes payable occurs; or
14-14                (2)  the date the person obligated to pay the
14-15    commission records a conveyance of that person's commercial real
14-16    estate interest after executing the lease agreement relating to the
14-17    lease transaction for which the lien is claimed.
14-18          (d)  If a notice of lien is not filed within the time
14-19    required by this section, the lien is void.
14-20              (Sections 62.042-62.060 reserved for expansion
14-21                    SUBCHAPTER D.  ENFORCEMENT OF LIEN
14-22          Sec. 62.061.  SUIT TO FORECLOSE LIEN.  (a) A broker may not
14-23    bring a suit to foreclose a lien under this chapter unless the
14-24    commission is earned and payable.  A broker may bring a suit to
14-25    foreclose a lien in any district court for the county in which the
14-26    commercial real estate is located by filing a sworn complaint
14-27    stating that the notice of lien has been recorded.
 15-1          (b)  A complaint in a suit filed under this section must
 15-2    contain:
 15-3                (1)  a brief description of the commission agreement
 15-4    that is the basis for the lien, including:
 15-5                      (A)  a description of the disclosure of the
 15-6    broker's right to the lien contained in the commission agreement;
 15-7                      (B)  the date on which the commission agreement
 15-8    was executed;
 15-9                      (C)  the event for which a commission is
15-10    considered to be earned; and
15-11                      (D)  the event for which a commission is
15-12    considered to be payable;
15-13                (2)  a description of the services performed by the
15-14    broker;
15-15                (3)  the amount of the payable commission that is
15-16    unpaid;
15-17                (4)  a description of the commercial real estate to
15-18    which the lien attaches; and
15-19                (5)  other facts necessary for a full understanding of
15-20    the rights of the parties.
15-21          (c)  The broker must include as a defendant in a suit brought
15-22    under this subchapter each person the broker believes to have an
15-23    interest in the commercial real estate that is subordinate to or
15-24    encumbered by the broker's lien.
15-25          (d)  If the broker and a person against whom the broker
15-26    claims a commission use alternative dispute resolution procedures
15-27    to resolve a dispute concerning entitlement to the broker's
 16-1    commission, the broker's lien remains valid, and any suit to
 16-2    foreclose the lien is stayed until the alternative dispute
 16-3    resolution process is completed.
 16-4          Sec. 62.062.  STATUTE OF LIMITATIONS.  (a)  Except as
 16-5    provided by this section, a broker claiming a lien under this
 16-6    chapter must bring a suit to foreclose the lien on or before the
 16-7    second anniversary of the date the notice of lien is recorded.
 16-8          (b)  A broker claiming a lien to collect a deferred
 16-9    commission must bring a suit to foreclose the lien on or before the
16-10    earlier of:
16-11                (1)  the second anniversary of the date on which the
16-12    commission is payable; or
16-13                (2)  the 10th anniversary of the date the lien is
16-14    recorded or the 10th anniversary of the date the broker records a
16-15    subsequent notice of the lien as a renewal of the broker's right to
16-16    the lien, whichever date is later.
16-17          (c)  A renewal of a notice of lien must state that it is a
16-18    renewal of the broker's lien and must be recorded after the ninth
16-19    anniversary after the date the original notice of lien or last
16-20    renewal notice is recorded and on or before the 10th anniversary of
16-21    the date the original notice of lien or last renewal notice is
16-22    recorded.
16-23          (d)  A broker claiming a lien for a commission that is
16-24    payable must bring a suit to foreclose the lien not later than the
16-25    30th day after the date the broker receives a written demand to
16-26    bring a suit to foreclose the lien from the owner of the commercial
16-27    real estate interest on which the lien is claimed.
 17-1          (e)  If a suit to foreclose the lien is not brought within
 17-2    the period prescribed by this section, the lien is void.
 17-3          Sec. 62.063.  ASSESSMENT OF COSTS, FEES, AND INTEREST.  The
 17-4    prevailing party in a suit brought under this subchapter is
 17-5    entitled to court costs, reasonable attorney's fees, and
 17-6    prejudgment interest.
 17-7              (Sections 62.064-62.080 reserved for expansion
 17-8                      SUBCHAPTER E.  RELEASE OF LIEN
 17-9          Sec. 62.081.  RELEASE OF LIEN.  (a)  Not later than the fifth
17-10    day after the date a broker receives a written request from the
17-11    owner of a commercial real estate interest on which a lien is
17-12    claimed, the broker shall furnish to the owner a release of
17-13    indebtedness and any lien claimed if:
17-14                (1)  the debt that is the basis for the lien is
17-15    satisfied; or
17-16                (2)  the lien is discharged under Section 62.022,
17-17    rendered void under Section 62.026 or 62.062, or extinguished under
17-18    Section 62.031.
17-19          (b)  When a condition occurs that would preclude the broker
17-20    from receiving a commission under the terms of the commission
17-21    agreement that is the basis for the lien, the broker shall, not
17-22    later than the 10th day after the date the broker receives a
17-23    written request from the owner of the commercial real estate
17-24    interest on which the lien is claimed, furnish to the owner a
17-25    release of indebtedness and any lien claimed.
17-26          (c)  A release of lien must be in a form that permits the
17-27    instrument to be filed of record.
 18-1              (Sections 62.082-62.100 reserved for expansion
 18-2                 SUBCHAPTER F.  ESCROW OF DISPUTED AMOUNTS
 18-3          Sec. 62.101.  ESCROW ACCOUNT.  If a claim for a lien under a
 18-4    recorded notice of lien is not paid or assumed at the closing of a
 18-5    sale, lease, or mortgage of the commercial real estate interest
 18-6    subject to the lien and would prevent the closing of the
 18-7    transaction or conveyance, any person named in the notice of lien
 18-8    as obligated to pay the commission shall, on the date of the
 18-9    closing:
18-10                (1)  establish an escrow account from any net proceeds
18-11    of the transaction or conveyance in an amount equal to the amount
18-12    sufficient to satisfy the lien plus 15 percent of that amount; or
18-13                (2)  file a bond to indemnify against the lien as
18-14    provided by Subchapter G.
18-15          Sec. 62.102.  NAMED ESCROW AGENT.  If an escrow agent is
18-16    named in the contract on which the transaction or conveyance is
18-17    based, the escrow account shall be established with the named
18-18    escrow agent.
18-19          Sec. 62.103.  COSTS OF INTERPLEADER.  Related costs for any
18-20    interpleader action may be deducted from the escrow account by the
18-21    person maintaining the escrow account.
18-22          Sec. 62.104.  REFUSAL TO ESTABLISH ESCROW ACCOUNT OR BOND.
18-23    (a)  A party may not refuse to close a transaction because of the
18-24    requirement to establish an escrow account or bond as provided by
18-25    Section 62.101 if:
18-26                (1)  the broker provides a copy of the notice of lien
18-27    that complies with Sections 62.025 and 62.026;
 19-1                (2)  sufficient proceeds will result from the proposed
 19-2    transaction for the payment of the commission and costs of the
 19-3    interpleader; and
 19-4                (3)  the broker executes and delivers a full  release
 19-5    of the broker's lien in a recordable form.
 19-6          (b)  A prospective buyer of a commercial real estate interest
 19-7    may not refuse to close the purchase solely because a broker's lien
 19-8    is filed after the date a title commitment or abstract of title
 19-9    relating to the interest is issued if an escrow account is
19-10    established as provided by this subchapter or a bond is filed as
19-11    provided by Subchapter G.
19-12          Sec. 62.105.  TERM OF ESCROW ACCOUNT.  The amount held in
19-13    escrow shall be held in escrow until:
19-14                (1)  the rights of the parties claiming the amount in
19-15    escrow are determined by a written agreement of the parties, a
19-16    court order, or an alternative dispute resolution process agreed to
19-17    by the parties;
19-18                (2)  the broker's lien is no longer enforceable; or
19-19                (3)  the funds are interpled into a district court for
19-20    the county in which the commercial real estate is located.
19-21          Sec. 62.106.  EXTINGUISHMENT OF LIEN UPON ESCROW.  When the
19-22    escrow account is established under this section, the broker's lien
19-23    against the commercial real estate is extinguished and becomes a
19-24    lien on the proceeds in the escrow account.
19-25              (Sections 62.107-62.120 reserved for expansion
19-26               SUBCHAPTER G.  BOND TO INDEMNIFY AGAINST LIEN
19-27          Sec. 62.121.  BOND.  (a)  If a lien is fixed or is attempted
 20-1    to be fixed by a recorded instrument under this chapter,  any
 20-2    person may file a bond to indemnify against the lien.
 20-3          (b)  The bond shall be filed with the county clerk of the
 20-4    county in which the commercial real estate subject to the lien is
 20-5    located.
 20-6          Sec. 62.122.  BOND REQUIREMENTS.  The bond must:
 20-7                (1)  describe the commercial real estate on which the
 20-8    lien is claimed;
 20-9                (2)  refer to the lien claimed in a manner sufficient
20-10    to identify it;
20-11                (3)  be in an amount that is double the amount of the
20-12    lien referred to in the bond as of the date of execution of the
20-13    bond by the surety, unless the total amount claimed in the lien
20-14    exceeds $40,000, in which case the bond must be in an amount that
20-15    is 1-1/2 times the amount of the lien;
20-16                (4)  be payable to the party claiming the lien;
20-17                (5)  be executed by:
20-18                      (A)  the party filing the bond as principal; and
20-19                      (B)  a corporate surety licensed by this state to
20-20    execute the bond as surety;
20-21                (6)  be conditioned substantially that the principal
20-22    and sureties will pay the named obligees or their assignees the
20-23    amount that the named obligees would have been entitled to recover
20-24    if their claim had been proved to be valid and enforceable liens on
20-25    the commercial real estate; and
20-26                (7)  identify the last known mailing address of the
20-27    person claiming the lien.
 21-1          Sec. 62.123.  NOTICE OF BOND.  (a)  After the bond is filed,
 21-2    the county clerk shall issue notice of the bond to all named
 21-3    obligees.
 21-4          (b)  A copy of the bond must be attached to the notice.
 21-5          (c)  The notice must be served on each obligee by mailing a
 21-6    copy of the notice and the bond to the obligee by certified mail,
 21-7    return receipt requested, addressed to the claimant at the address
 21-8    stated in the bond for the obligee.
 21-9          Sec. 62.124.  RECORDING OF BOND AND NOTICE.  (a)  The county
21-10    clerk shall record the bond, the notice, and a certificate of
21-11    mailing in the real property records.
21-12          (b)  In acquiring an interest in or insuring title to the
21-13    commercial real estate, a buyer, insurer of title, or lender may
21-14    rely on and is absolutely protected by the record of the bond and
21-15    the notice to the same extent as if the lien claimant had filed a
21-16    release of lien in the real property records.
21-17          Sec. 62.125.  ACTION ON BOND.  (a)  A party making or holding
21-18    a lien claim may not sue on the bond later than the last date on
21-19    which a person may bring a suit to foreclose the lien under Section
21-20    62.062.
21-21          (b)  The bond is not exhausted by one action against it.
21-22    Each named obligee or assignee of an obligee may maintain a
21-23    separate suit on the bond in any district court for the county in
21-24    which the commercial real estate is located.
21-25              (Sections 62.126-62.140 reserved for expansion
21-26                          SUBCHAPTER H.  REMEDIES
21-27          Sec. 62.141.  OWNER OR TENANT'S REMEDIES.  (a)  An owner or
 22-1    tenant may file suit against a broker under this chapter.
 22-2          (b)  In an action filed under this section, the court shall
 22-3    discharge a broker's lien if the broker:
 22-4                (1)  failed to mail a copy of the notice of lien within
 22-5    the period prescribed by Section 62.026;
 22-6                (2)  failed to execute, acknowledge, and return a
 22-7    subordination agreement within the period prescribed by Section
 22-8    62.029(d);
 22-9                (3)  failed to record the notice of lien within the
22-10    period prescribed by Section 62.041; or
22-11                (4)  failed to release a lien within the period
22-12    prescribed by Section 62.081.
22-13          (c)  A broker is liable to an owner or tenant for damages as
22-14    provided by Subsection (d) if:
22-15                (1)  the broker recorded a lien on the commercial real
22-16    estate interest of the owner or tenant;
22-17                (2)  the broker failed to:
22-18                      (A)  execute, acknowledge, and return a
22-19    subordination agreement within the period prescribed by Section
22-20    62.029(d); or
22-21                      (B)  release a lien within the period prescribed
22-22    by Section 62.081;
22-23                (3)  the owner or tenant mailed to the broker by
22-24    certified mail, return receipt requested, a copy of this section
22-25    and a notice requesting the owner to execute, acknowledge, and
22-26    return the subordination agreement or release the lien not later
22-27    than the 10th day after the date the broker receives the notice;
 23-1    and
 23-2                (4)  the broker failed to comply with the owner's or
 23-3    tenant's written notice within the prescribed period.
 23-4          (d)  If the court finds that a broker is liable to an owner
 23-5    or tenant under Subsection (c), the court may award the owner or
 23-6    tenant:
 23-7                (1)  actual damages, including attorney's fees and
 23-8    court costs, incurred by the owner or tenant that are proximately
 23-9    caused by the broker's failure to execute, acknowledge, and return
23-10    the subordination agreement or release the lien; and
23-11                (2)  a civil penalty in an amount equal to three times
23-12    the amount of the claimed commission if the court finds that the
23-13    broker acted with gross negligence or acted in bad faith in
23-14    violation of The Real Estate License Act (Article 6573a, Vernon's
23-15    Texas Civil Statutes).
23-16          (e)  An individual broker who was the designated officer of a
23-17    corporate or partnership broker at the time the corporate or
23-18    partnership broker violated this chapter is liable for any
23-19    unsatisfied damages or civil penalties awarded under Subsection (d)
23-20    if the individual broker was named as a defendant in an action
23-21    filed under this section.
23-22          (f)  This section does not prevent:
23-23                (1)  a person from filing a complaint with the Texas
23-24    Real Estate Commission against a broker who fails to comply with
23-25    this chapter; or
23-26                (2)  the Texas Real Estate Commission at any time from
23-27    investigating or initiating a disciplinary proceeding against a
 24-1    broker who fails to comply with this chapter.
 24-2          Sec. 62.142.  BROKER'S REMEDIES.  (a)  A broker may file suit
 24-3    against an owner or tenant to enforce a commission agreement.
 24-4          (b)  If the court finds that the broker waived the right to
 24-5    file a lien under Section 62.022 and that the owner or tenant
 24-6    violated the commission agreement, the court may award to the
 24-7    broker:
 24-8                (1)  actual damages, including attorney's fees and
 24-9    court costs, that are proximately caused by the owner's or tenant's
24-10    failure to comply with the commission agreement; and
24-11                (2)  a civil penalty in an amount equal to three times
24-12    the amount of the claimed commission if the court finds that the
24-13    owner or tenant acted with gross negligence or in bad faith.
24-14          SECTION 2.  This Act takes effect September 1, 1999.  The
24-15    change in law made by this Act applies only to an agreement to
24-16    compensate a licensed real estate broker or appraiser that is
24-17    entered into on or after the effective date of this Act.
24-18          SECTION 3.  The importance of this legislation and the
24-19    crowded condition of the calendars in both houses create an
24-20    emergency and an imperative public necessity that the
24-21    constitutional rule requiring bills to be read on three several
24-22    days in each house be suspended, and this rule is hereby suspended.