76R12676 E
By Brimer H.B. No. 1052
Substitute the following for H.B. No. 1052:
By Brimer C.S.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 commercial square feet or less
1-20 than 20,000 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.