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.