By Wentworth S.B. No. 1008 76R3662 PAM-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to creating a real estate broker's lien on commercial real 1-3 estate. 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 LIEN ON COMMERCIAL REAL ESTATE 1-8 SUBCHAPTER A. GENERAL PROVISIONS 1-9 Sec. 62.001. SHORT TITLE. This chapter may be cited as the 1-10 Broker's Lien on Commercial Real Estate Act. 1-11 Sec. 62.002. APPLICABILITY. This chapter applies only to 1-12 real estate that is commercial real estate on the date the notice 1-13 of lien is filed under this chapter. 1-14 Sec. 62.003. DEFINITIONS. In this chapter: 1-15 (1) "Broker" means a person who: 1-16 (A) is licensed as a real estate broker under 1-17 The Real Estate License Act (Article 6573a, Vernon's Texas Civil 1-18 Statutes) and is not acting as a residential rental locator as 1-19 defined by Section 24, The Real Estate License Act (Article 6573a, 1-20 Vernon's Texas Civil Statutes); or 1-21 (B) is licensed or certified as a real estate 1-22 appraiser under the Texas Appraiser Licensing and Certification Act 1-23 (Article 6573a.2, Vernon's Texas Civil Statutes). 1-24 (2) "Commercial real estate" means all real estate 2-1 except: 2-2 (A) real estate improved with one to four 2-3 residential units; 2-4 (B) a single-family residential unit, including 2-5 a condominium, townhouse, or home in a subdivision, if the unit is 2-6 sold, leased, or otherwise conveyed on a unit-by-unit basis and 2-7 regardless of whether the unit is part of a larger building or 2-8 located on real estate containing more than four residential units; 2-9 (C) real estate that is a person's homestead; or 2-10 (D) real estate that is not improved with a 2-11 structure and is: 2-12 (i) zoned for single-family residential 2-13 use; or 2-14 (ii) restricted for single-family use 2-15 under restrictive covenants that will remain in effect for at least 2-16 the next two years. 2-17 (3) "Commission" includes a fee or other valuable 2-18 consideration. 2-19 (4) "Commission agreement" means a written instrument 2-20 that: 2-21 (A) entitles a broker to a commission; 2-22 (B) is signed by the person obligated to pay the 2-23 commission or that person's authorized agent; 2-24 (C) references the commission amount or 2-25 describes the formula used to determine the commission amount; and 2-26 (D) contains a description legally sufficient 2-27 for identification of the real estate that is the subject of the 3-1 agreement if the person obligated to pay the commission is a seller 3-2 or lessor. 3-3 (5) "Deferred commission" means a commission that is 3-4 earned and is not yet payable. 3-5 (6) "Real estate" has the meaning assigned by Section 3-6 2, The Real Estate License Act (Article 6573a, Vernon's Texas Civil 3-7 Statutes). 3-8 Sec. 62.004. EARNED COMMISSION AND PAYABLE COMMISSION. (a) 3-9 If the broker enters into a commission agreement with a seller or 3-10 lessor of the commercial real estate, a commission is earned at the 3-11 time the broker presents to the seller or lessor a ready, willing, 3-12 and able buyer or tenant to purchase or lease all or part of the 3-13 commercial real estate on the seller's or lessor's terms. 3-14 (b) If the broker enters into a commission agreement with a 3-15 prospective buyer or tenant of commercial real estate, a commission 3-16 is earned at the time the broker presents to the prospective buyer 3-17 or tenant a property suitable for purchase or lease on the buyer's 3-18 or tenant's terms. 3-19 (c) If the broker enters into a commission agreement to 3-20 provide appraisal services, a commission is earned at the time the 3-21 broker delivers the appraisal to the person obligated to pay the 3-22 commission. 3-23 (d) A commission is payable at the time provided by the 3-24 commission agreement. 3-25 Sec. 62.005. BROKER'S ADDRESS FOR RECEIPT OF NOTICE. A 3-26 seller, lessor, buyer, or tenant shall send any notice required to 3-27 be sent to the broker under this chapter to the broker at: 4-1 (1) the broker's last known address as reflected in 4-2 the person's records; and 4-3 (2) the broker's address as reflected in the records 4-4 of the Texas Real Estate Commission. 4-5 (Sections 62.006-62.020 reserved for expansion) 4-6 SUBCHAPTER B. BROKER'S LIEN 4-7 Sec. 62.021. PERSON ENTITLED TO LIEN. (a) A broker has a 4-8 lien on commercial real estate in the amount specified by the 4-9 commission agreement if: 4-10 (1) the broker has earned a commission under a 4-11 commission agreement signed by the seller or lessor of the 4-12 commercial real estate or the seller's or lessor's authorized 4-13 agent; and 4-14 (2) a notice of lien is recorded and indexed as 4-15 provided by Section 62.024. 4-16 (b) A broker has a lien on the interest in commercial real 4-17 estate that a prospective buyer purchases in the amount specified 4-18 by the commission agreement if: 4-19 (1) the broker has earned a commission under a 4-20 commission agreement signed by the prospective buyer of the 4-21 commercial real estate or the prospective buyer's authorized agent; 4-22 and 4-23 (2) a notice of lien is recorded and indexed as 4-24 provided by Section 62.024. 4-25 (c) A broker has a lien on the leasehold interest in 4-26 commercial real estate of a prospective tenant in the amount 4-27 specified by the commission agreement if: 5-1 (1) the broker has earned a commission under a 5-2 commission agreement signed by the prospective tenant of the 5-3 commercial real estate or the prospective tenant's authorized 5-4 agent; and 5-5 (2) a notice of lien is recorded and indexed as 5-6 provided by Section 62.024. 5-7 (d) A lien described by this section is available only to 5-8 the broker named in the commission agreement. The lien is not 5-9 available to an employee or independent contractor of the broker. 5-10 (e) The broker's right to claim a lien based on the 5-11 commission agreement must be disclosed in the commission agreement. 5-12 Sec. 62.022. WAIVER OR RELEASE AND DISCHARGE OF LIEN. (a) 5-13 The waiver of a broker's entitlement to a lien under this chapter, 5-14 or the release of a lien given for the purpose of releasing a 5-15 broker's lien before the commission is satisfied or forgiven, is 5-16 void. 5-17 (b) A lien under this chapter is discharged by: 5-18 (1) paying the commission to the broker named in the 5-19 commission agreement; or 5-20 (2) establishing an escrow account described by 5-21 Subchapter F. 5-22 Sec. 62.023. AFFIDAVIT IDENTIFYING BROKER. If requested by 5-23 the buyer, the buyer's authorized agent, or the escrow agent for 5-24 the commercial real estate transaction, the seller of commercial 5-25 real estate and the broker representing the seller shall provide to 5-26 the requesting party before the closing of the transaction a 5-27 written affidavit identifying each broker with whom the affiant 6-1 knows or believes the seller or the seller's authorized agent has 6-2 signed a commission agreement. 6-3 Sec. 62.024. FILING OF NOTICE OF LIEN. (a) A broker 6-4 claiming a lien under this chapter may not file a notice of lien 6-5 unless the commission on which the lien is based is earned. 6-6 (b) A broker claiming a lien under this chapter must file a 6-7 notice of lien as provided by Subchapter C with the county clerk of 6-8 the county in which the commercial real estate is located. 6-9 (c) The county clerk shall record the notice of lien in 6-10 records kept for that purpose and shall index and cross-index the 6-11 notice of lien in the names of the broker, each person obligated to 6-12 pay the commission under the commission agreement, and each owner 6-13 of the interest in the commercial real estate on which the lien is 6-14 claimed. 6-15 Sec. 62.025. CONTENTS OF NOTICE OF LIEN. The notice of lien 6-16 must be signed by the broker or by a person authorized to sign on 6-17 behalf of the broker and must contain the following: 6-18 (1) a sworn statement of the nature and amount of the 6-19 claim, including: 6-20 (A) the commission amount or the formula used to 6-21 determine the commission; and 6-22 (B) the type of commission at issue, including a 6-23 deferred commission; 6-24 (2) the name of the broker and the real estate license 6-25 number of the broker; 6-26 (3) the name as reflected in the broker's records of 6-27 any person who the broker believes is obligated to pay the 7-1 commission under the commission agreement; 7-2 (4) the name as reflected in the broker's records of 7-3 any person the broker believes to be an owner of the interest in 7-4 the real estate on which the lien is claimed; 7-5 (5) a description legally sufficient for 7-6 identification of the interest in the commercial real estate sought 7-7 to be charged with the lien; and 7-8 (6) a copy of the commission agreement. 7-9 Sec. 62.026. NOTICE OF FILING. (a) In this section, 7-10 "business day" means a day other than a Saturday, Sunday, or 7-11 holiday recognized by this state. 7-12 (b) Not later than one business day after the date the 7-13 broker files a notice of lien, the broker shall mail a copy of the 7-14 notice of lien by certified mail, return receipt requested, or 7-15 registered mail to: 7-16 (1) the owner of record of the interest in the 7-17 commercial real estate on which the lien is claimed or the owner's 7-18 authorized agent; and 7-19 (2) the prospective buyer or tenant and any escrow 7-20 agent named in a contract for the sale or lease of the interest in 7-21 the commercial real estate on which the lien is claimed if: 7-22 (A) a binding written contract for the sale or 7-23 lease of the interest in the commercial real estate is in effect 7-24 between the owner and the prospective buyer or tenant in a 7-25 transaction that is the basis for the commission; and 7-26 (B) the binding written contract was executed by 7-27 the owner and the prospective buyer or tenant before the date the 8-1 notice of lien is filed. 8-2 (c) Service of the notice under Subsection (b) is complete 8-3 when the notice is deposited in the United States mail, postage 8-4 prepaid, and addressed to the persons entitled to receive the 8-5 notice under this section. 8-6 (d) If the broker has actual knowledge of the identity of 8-7 the escrow agent named in the contract for the sale or lease of the 8-8 interest in the commercial real estate on which the broker claims a 8-9 lien or of the escrow agent otherwise closing the sale or lease of 8-10 the interest in the commercial real estate, the broker, before the 8-11 first business day before the date that the sale or lease is 8-12 closed, shall deliver a file-stamped copy or transmit a facsimile 8-13 of a file-stamped copy of the notice of lien to each escrow agent 8-14 at the office in which the closing of the sale or lease will occur 8-15 for use during the closing of the sale or lease. The broker shall 8-16 deliver the copy or transmit the facsimile directly to the 8-17 individual escrow agent responsible for closing the sale or lease 8-18 if the broker knows that person's name. 8-19 (e) If the escrow agent receives the notice of lien, the 8-20 escrow agent and other parties to the sale or lease may not close 8-21 the transaction unless the lien is released or the funds are held 8-22 in escrow as provided by Subchapter F. 8-23 (f) If the broker fails to comply with this section, the 8-24 notice of lien is void. 8-25 Sec. 62.027. INCEPTION OF BROKER'S LIEN. (a) A broker's 8-26 lien attaches to the interest in the commercial real estate owned 8-27 by the person obligated to pay the commission on the date the 9-1 notice of lien is recorded as provided by this chapter. The lien 9-2 does not relate back to the date of the commission agreement. 9-3 (b) A notice of lien for amounts earned by the broker under 9-4 an installment contract or under a commission agreement for a 9-5 deferred commission is enforceable only to the extent that the 9-6 installment or commission has become payable. 9-7 Sec. 62.028. PRIORITY. (a) A recorded lien, mortgage, or 9-8 other encumbrance on commercial real estate, including a recorded 9-9 lien securing revolving credit and future advances for a loan, 9-10 recorded before the date a broker's lien is recorded has priority 9-11 over the broker's lien. 9-12 (b) A broker's lien on the interest in commercial real 9-13 estate of a person obligated to pay a commission is not valid or 9-14 enforceable against a grantee, buyer, lessee, or transferee of the 9-15 interest of the person obligated to pay the commission if the deed, 9-16 lease, or instrument transferring the interest is recorded before 9-17 the notice of the broker's lien is recorded. 9-18 (c) A purchase-money mortgage lien executed by the buyer of 9-19 the interest in the commercial real estate has priority over a 9-20 broker's lien claimed against the prospective buyer for the 9-21 commission owed by that buyer. 9-22 (d) A mechanic's lien that is recorded after a broker's lien 9-23 and that relates back to a date before the date the broker's lien 9-24 is recorded has priority over the broker's lien. 9-25 Sec. 62.029. SUBORDINATION. (a) If the person obligated to 9-26 pay the commission sells that person's interest in the commercial 9-27 real estate, the broker's lien is subordinate to a recorded 10-1 purchase-money first lien authorized by the buyer if the buyer: 10-2 (1) executes and files with the county clerk of the 10-3 county in which the broker's lien is filed a memorandum that 10-4 evidences the buyer's ratification of the broker's lien and the 10-5 buyer's assumption of the obligation to pay the broker the 10-6 commission as provided by the commission agreement that is the 10-7 basis for the lien; and 10-8 (2) sends the broker, by certified mail, return 10-9 receipt requested, or registered mail, a copy of the recorded 10-10 memorandum required by this subsection. 10-11 (b) If the person obligated to pay the commission refinances 10-12 a recorded first lien secured by that person's interest in the 10-13 commercial real estate, the broker's lien is subordinate to the 10-14 recorded refinanced first lien, regardless of the amount of the 10-15 first lien after refinancing, if the person obligated to pay the 10-16 commission: 10-17 (1) executes and files with the county clerk of the 10-18 county in which the broker's lien is filed a memorandum that 10-19 evidences the person's ratification of the broker's lien and the 10-20 person's obligation to pay the broker the commission as provided by 10-21 the commission agreement that is the basis for the lien; and 10-22 (2) sends the broker, by certified mail, return 10-23 receipt requested, or registered mail, a copy of the recorded 10-24 memorandum required by this subsection. 10-25 (c) If the person obligated to pay the commission obtains an 10-26 extension of credit secured by that person's interest in the 10-27 commercial real estate, the broker's lien is subordinate to the 11-1 lien securing the extension of credit if, according to the lien 11-2 documents, the extension of credit is made only for the purpose of: 11-3 (1) repairing or renovating the commercial real 11-4 estate; or 11-5 (2) completing construction or providing additional 11-6 improvements on the commercial real estate. 11-7 (d) If the person obligated to pay the commission furnishes 11-8 a subordination agreement as provided by this section to be 11-9 executed by the broker, the broker must: 11-10 (1) execute and acknowledge the subordination 11-11 agreement before a notary public; and 11-12 (2) return the subordination agreement to the person 11-13 not later than the seventh day after the date the broker receives 11-14 the subordination agreement and other documents the broker 11-15 reasonably requests in order to determine that the subordination 11-16 agreement complies with this section. 11-17 Sec. 62.030. MIXED-USE REAL ESTATE. If real estate is zoned 11-18 or restricted for more than one use, the broker's lien attaches 11-19 only to the portions of the real estate that constitute commercial 11-20 real estate. 11-21 Sec. 62.031. CHANGE IN USE OF REAL ESTATE. (a) Except as 11-22 provided by Subsection (b), any change in the use of the real 11-23 estate does not affect a broker's lien if the notice of the lien 11-24 was filed when the real estate was commercial real estate. 11-25 (b) The broker's lien is extinguished if: 11-26 (1) not later than the 360th day after the date on 11-27 which the broker's commission is payable, the commercial real 12-1 estate on which a broker claims a lien is zoned for single-family 12-2 use or restricted for single-family use under recorded restrictive 12-3 covenants; and 12-4 (2) the zoning ordinances or restrictive covenants for 12-5 single-family use are in effect until at least the second 12-6 anniversary of the date the commission is payable. 12-7 (Sections 62.032-62.040 reserved for expansion) 12-8 SUBCHAPTER C. TIME FOR FILING NOTICE OF LIEN 12-9 Sec. 62.041. TIME TO FILE. (a) If a broker has earned a 12-10 commission under a commission agreement signed by a seller or the 12-11 seller's authorized agent, a broker must record a notice of lien: 12-12 (1) after the commission is earned; and 12-13 (2) before the conveyance of the interest in the 12-14 commercial real estate on which the broker is claiming a lien. 12-15 (b) If a broker has earned a commission under a commission 12-16 agreement signed by a prospective buyer or a prospective buyer's 12-17 authorized agent, the broker must record a notice of lien: 12-18 (1) after the buyer acquires legal title to the 12-19 interest in the commercial real estate on which the broker is 12-20 claiming a lien; and 12-21 (2) before the buyer conveys the buyer's interest in 12-22 the commercial real estate on which the broker is claiming a lien. 12-23 (c) If the lien is based on a lease transaction, the broker 12-24 must record a notice of lien after the commission is earned and 12-25 before the earlier of: 12-26 (1) the 91st day after the date the event for which 12-27 the commission becomes payable occurs; or 13-1 (2) the date the person obligated to pay the 13-2 commission records a conveyance of that person's interest in the 13-3 commercial real estate after executing the lease agreement relating 13-4 to the lease transaction for which the lien is claimed. 13-5 (d) If a notice of lien is not filed within the time 13-6 required by this section, the lien is void. 13-7 (Sections 62.042-62.060 reserved for expansion) 13-8 SUBCHAPTER D. ENFORCEMENT OF LIEN 13-9 Sec. 62.061. SUIT TO FORECLOSE LIEN. (a) A broker may not 13-10 bring a suit to foreclose a lien under this chapter unless the 13-11 commission is earned and payable. A broker may bring a suit to 13-12 foreclose a lien in any district court for the county in which the 13-13 commercial real estate is located by filing a sworn complaint 13-14 stating that the notice of lien has been recorded. 13-15 (b) A complaint in a suit filed under this section must 13-16 contain: 13-17 (1) a brief description of the commission agreement 13-18 that is the basis for the lien, including: 13-19 (A) a description of the disclosure of the 13-20 broker's right to the lien contained in the commission agreement; 13-21 (B) the date on which the commission agreement 13-22 was executed; 13-23 (C) the event for which a commission is 13-24 considered to be earned; and 13-25 (D) the event for which a commission is 13-26 considered to be payable; 13-27 (2) a description of the services performed by the 14-1 broker; 14-2 (3) the amount of the payable commission that is 14-3 unpaid; 14-4 (4) a description of the commercial real estate to 14-5 which the lien attaches; and 14-6 (5) other facts necessary for a full understanding of 14-7 the rights of the parties. 14-8 (c) The broker must include as a defendant in a suit brought 14-9 under this subchapter each person the broker believes to have an 14-10 interest in the commercial real estate that is subordinate to or 14-11 encumbered by the broker's lien. 14-12 (d) If the broker and a person against whom the broker 14-13 claims a commission use alternative dispute resolution procedures 14-14 to resolve a dispute concerning entitlement to the broker's 14-15 commission, the broker's lien remains valid, and any suit to 14-16 foreclose the lien is stayed until the alternative dispute 14-17 resolution process is completed. 14-18 Sec. 62.062. STATUTE OF LIMITATIONS. (a) Except as provided 14-19 by this section, a broker claiming a lien under this chapter must 14-20 bring a suit to foreclose the lien on or before the second 14-21 anniversary of the date the notice of lien is recorded. 14-22 (b) A broker claiming a lien to collect a deferred 14-23 commission must bring a suit to foreclose the lien on or before the 14-24 earlier of: 14-25 (1) the second anniversary of the date on which the 14-26 commission is payable; or 14-27 (2) the 10th anniversary of the date the lien is 15-1 recorded or the 10th anniversary of the date the broker records a 15-2 subsequent notice of the lien as a renewal of the broker's 15-3 entitlement to the lien, whichever date is later. 15-4 (c) A renewal of a notice of lien must state that it is a 15-5 renewal of the broker's lien and must be recorded after the ninth 15-6 anniversary after the date the original notice of lien or last 15-7 renewal notice is recorded and on or before the 10th anniversary of 15-8 the date the original notice of lien or last renewal notice is 15-9 recorded. 15-10 (d) A broker claiming a lien for a commission that is 15-11 payable must bring a suit to foreclose the lien not later than the 15-12 30th day after the date the broker receives a written demand to 15-13 bring a suit to foreclose the lien from the owner of the interest 15-14 in the commercial real estate on which the lien is claimed. 15-15 (e) If a suit to foreclose the lien is not brought within 15-16 the time required by this section, the lien is void. 15-17 Sec. 62.063. ASSESSMENT OF COSTS, FEES, AND INTEREST. The 15-18 prevailing party in a suit brought under this subchapter is 15-19 entitled to court costs, reasonable attorney's fees, and 15-20 prejudgment interest. 15-21 (Sections 62.064-62.080 reserved for expansion) 15-22 SUBCHAPTER E. RELEASE OF LIEN 15-23 Sec. 62.081. RELEASE OF LIEN. (a) When a debt that is the 15-24 basis for a lien under this chapter is satisfied, the broker shall, 15-25 not later than the fifth day after the date the broker receives a 15-26 written request from the owner of the interest in the commercial 15-27 real estate on which the lien is claimed, furnish to the owner a 16-1 release of indebtedness and any lien claimed. 16-2 (b) When a condition occurs that would preclude the broker 16-3 from receiving a commission under the terms of the commission 16-4 agreement that is the basis for the lien, the broker shall, not 16-5 later than the 10th day after the date the broker receives a 16-6 written request from the owner of the interest in the commercial 16-7 real estate on which the lien is claimed, furnish to the owner a 16-8 release of indebtedness and any lien claimed. 16-9 (c) A release of lien must be in a form that permits the 16-10 instrument to be filed of record. 16-11 (Sections 62.082-62.100 reserved for expansion) 16-12 SUBCHAPTER F. ESCROW OF DISPUTED AMOUNTS 16-13 Sec. 62.101. ESCROW ACCOUNT. If a claim for a lien under a 16-14 recorded notice of lien is not paid or assumed at the closing of a 16-15 sale, lease, or mortgage of the commercial real estate subject to 16-16 the lien and would prevent the closing of the transaction or 16-17 conveyance, any person named in the notice of lien as obligated to 16-18 pay the commission shall, on the date of the closing: 16-19 (1) establish an escrow account from the proceeds of 16-20 the transaction or conveyance in an amount sufficient to satisfy 16-21 the lien and related costs in an amount not less than 15 percent of 16-22 the amount of the lien for any interpleader action brought by the 16-23 person maintaining the escrow account; or 16-24 (2) file a bond to indemnify against the lien as 16-25 provided by Subchapter G. 16-26 Sec. 62.102. NAMED ESCROW AGENT. If an escrow agent is 16-27 named in the contract on which the transaction or conveyance is 17-1 based, the escrow account shall be established with the named 17-2 escrow agent. 17-3 Sec. 62.103. COSTS OF INTERPLEADER. Related costs for any 17-4 interpleader action may be deducted from the escrow account by the 17-5 person maintaining the escrow account. 17-6 Sec. 62.104. REFUSAL TO ESTABLISH AN ESCROW ACCOUNT. A 17-7 party may not refuse to close a transaction because of the 17-8 requirement to establish an escrow account as provided by this 17-9 section if: 17-10 (1) the broker provides a copy of the notice of lien 17-11 that complies with Section 62.026; 17-12 (2) sufficient proceeds will result from the proposed 17-13 transaction for the payment of the commission and costs of the 17-14 interpleader; and 17-15 (3) the broker executes and delivers a full release 17-16 of the broker's lien in a recordable form. 17-17 Sec. 62.105. TERM OF ESCROW ACCOUNT. The amount held in 17-18 escrow shall be held in escrow until: 17-19 (1) the rights of the parties claiming the amount in 17-20 escrow are determined by a written agreement of the parties, a 17-21 court order, or an alternative dispute resolution process agreed to 17-22 by the parties; 17-23 (2) the broker's lien is no longer enforceable; or 17-24 (3) the funds are interpled into a district court for 17-25 the county in which the commercial real estate is located. 17-26 Sec. 62.106. EXTINGUISHMENT OF LIEN UPON ESCROW. When the 17-27 escrow account is established under this section, the broker's lien 18-1 against the commercial real estate is extinguished and becomes a 18-2 lien on the proceeds in the escrow account. 18-3 (Sections 62.107-62.120 reserved for expansion) 18-4 SUBCHAPTER G. BOND TO INDEMNIFY AGAINST LIEN 18-5 Sec. 62.121. BOND. (a) If a lien is fixed or is attempted 18-6 to be fixed by a recorded instrument under this chapter, any 18-7 person may file a bond to indemnify against the lien. 18-8 (b) The bond shall be filed with the county clerk of the 18-9 county in which the commercial real estate subject to the lien is 18-10 located. 18-11 Sec. 62.122. BOND REQUIREMENTS. The bond must: 18-12 (1) describe the commercial real estate on which the 18-13 lien is claimed; 18-14 (2) refer to the lien claimed in a manner sufficient 18-15 to identify it; 18-16 (3) be in an amount that is double the amount of the 18-17 lien referred to in the bond as of the date of execution of the 18-18 bond by the surety, unless the total amount claimed in the lien 18-19 exceeds $40,000, in which case the bond must be in an amount that 18-20 is 1-1/2 times the amount of the lien; 18-21 (4) be payable to the party claiming the lien; 18-22 (5) be executed by: 18-23 (A) the party filing the bond as principal; and 18-24 (B) a corporate surety licensed by this state to 18-25 execute the bond as surety; 18-26 (6) be conditioned substantially that the principal 18-27 and sureties will pay the named obligees or their assignees the 19-1 amount that the named obligees would have been entitled to recover 19-2 if their claim had been proved to be valid and enforceable liens on 19-3 the commercial real estate; and 19-4 (7) identify the last known mailing address of the 19-5 person claiming the lien. 19-6 Sec. 62.123. NOTICE OF BOND. (a) After the bond is filed, 19-7 the county clerk shall issue notice of the bond to all named 19-8 obligees. 19-9 (b) A copy of the bond must be attached to the notice. 19-10 (c) The notice must be served on each obligee by mailing a 19-11 copy of the notice and the bond to the obligee by certified mail, 19-12 return receipt requested, addressed to the claimant at the address 19-13 stated in the bond for the obligee. 19-14 Sec. 62.124. RECORDING OF BOND AND NOTICE. (a) The county 19-15 clerk shall record the bond, the notice, and a certificate of 19-16 mailing in the real property records. 19-17 (b) In acquiring an interest in or insuring title to the 19-18 commercial real estate, a buyer, insurer of title, or lender may 19-19 rely on and is absolutely protected by the record of the bond and 19-20 the notice to the same extent as if the lien claimant had filed a 19-21 release of lien in the real property records. 19-22 Sec. 62.125. ACTION ON BOND. (a) A party making or holding 19-23 a lien claim may not sue on the bond later than the last date on 19-24 which a person may bring a suit to foreclose the lien under Section 19-25 62.062. 19-26 (b) The bond is not exhausted by one action against it. 19-27 Each named obligee or assignee of an obligee may maintain a 20-1 separate suit on the bond in any district court for the county in 20-2 which the commercial real estate is located. 20-3 SECTION 2. This Act takes effect September 1, 1999. The 20-4 change in law made by this Act applies only to an agreement to 20-5 compensate a licensed real estate broker that is entered into on or 20-6 after the effective date of this Act.