1.1                          A bill for an act 
  1.2             relating to liens; establishing a lien for commercial 
  1.3             real estate broker commissions; proposing coding for 
  1.4             new law in Minnesota Statutes, chapter 514. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [514.801] [DEFINITIONS.] 
  1.7      Subdivision 1.  [GENERAL.] The definitions in this section 
  1.8   apply to sections 514.801 to 514.804. 
  1.9      Subd. 2.  [BROKER.] "Broker" means a real estate broker 
  1.10  licensed under section 82.20. 
  1.11     Subd. 3.  [COMMERCIAL REAL ESTATE.] "Commercial real estate"
  1.12  means any real property, other than the following: 
  1.13     (1) real property containing eight or fewer dwelling units; 
  1.14     (2) real property that is zoned for residential purposes 
  1.15  and that does not contain any buildings or structures; or 
  1.16     (3) real property that is zoned for agricultural purposes. 
  1.17     Sec. 2.  [514.802] [COMMERCIAL REAL ESTATE BROKER 
  1.18  COMMISSION LIEN.] 
  1.19     Subdivision 1.  [LISTING CONTRACT.] If a broker has earned 
  1.20  a commission under a written commercial real estate listing 
  1.21  contract, the broker has a lien for the unpaid amount of the 
  1.22  commission against the commercial real estate, or the interest 
  1.23  in commercial real estate, that is listed with the broker under 
  1.24  the contract. 
  1.25     Subd. 2.  [BUYER AGENCY AGREEMENT.] If a broker has earned 
  2.1   a commission under a written commercial real estate buyer agency 
  2.2   agreement, the broker has a lien for the unpaid amount of the 
  2.3   commission against the commercial real estate, or the interest 
  2.4   in commercial real estate, that is acquired as a result of the 
  2.5   agreement. 
  2.6      Subd. 3.  [LEASE OR MANAGEMENT SERVICES AGREEMENT.] If a 
  2.7   broker has earned compensation under a written agreement for the 
  2.8   lease or management of commercial real estate, the broker has a 
  2.9   lien for the unpaid amount of the compensation against the 
  2.10  commercial real estate for which the leasing or management 
  2.11  services were provided under the agreement. 
  2.12     Sec. 3.  [514.803] [NOTICE AND PERFECTION.] 
  2.13     Subdivision 1.  [NOTICE OF INTENT TO CLAIM LIEN.] (a) A 
  2.14  broker only has a lien under section 514.802, subdivision 1 or 
  2.15  2, if the broker: 
  2.16     (1) files or records a written notice of intent to claim a 
  2.17  lien under this section at the office of the county recorder or, 
  2.18  if registered land, the registrar of titles of the county in 
  2.19  which the commercial real estate is located; and 
  2.20     (2) delivers a copy of the notice to the person owing the 
  2.21  commission. 
  2.22     (b) A broker only has a lien under section 514.802, 
  2.23  subdivision 3, if the broker provides a written notice of intent 
  2.24  to claim a lien under this section to the person owing the 
  2.25  compensation. 
  2.26     (c) Notices required under this subdivision must contain 
  2.27  the name of each party to the agreement under which the lien is 
  2.28  claimed, the date that the agreement was entered into, and a 
  2.29  brief description of the commercial real estate on which the 
  2.30  lien is intended to be claimed.  Notices required under this 
  2.31  subdivision must be provided within the following time periods: 
  2.32     (1) in the case of a lien under section 514.802, 
  2.33  subdivision 1, at least 30 days before the conveyance of the 
  2.34  commercial real estate subject to the listing contract; 
  2.35     (2) in the case of a lien under section 514.802, 
  2.36  subdivision 2, at least 30 days before the conveyance of the 
  3.1   commercial real estate subject to the buyer agency agreement; 
  3.2   and 
  3.3      (3) in the case of a lien under section 514.802, 
  3.4   subdivision 3, before the date that the written agreement for 
  3.5   the lease or management of commercial real estate is entered 
  3.6   into. 
  3.7      Subd. 2.  [PERFECTION OF LIEN.] (a) A lien under this 
  3.8   section is perfected when a broker files a notice of lien in the 
  3.9   office of the county recorder or, if registered land, the 
  3.10  registrar of titles for the county in which the commercial real 
  3.11  estate is located. 
  3.12     (b) In the case of a lien under section 514.802, 
  3.13  subdivision 1 or 2, the lien must be perfected three days before 
  3.14  the date that the conveyance documents are recorded with the 
  3.15  registrar of titles or county recorder in the county where the 
  3.16  real property that is the subject of the listing contract or 
  3.17  buyer agency contract is located.  In the case of a lien under 
  3.18  section 514.802, subdivision 3, the lien must be perfected 90 
  3.19  days after the later of the following: 
  3.20     (1) the date that the broker earns a commission or 
  3.21  compensation that gives rise to a lien under section 514.802; or 
  3.22     (2) the date that the broker receives notice that the 
  3.23  broker has earned a commission or compensation that gives rise 
  3.24  to a lien under section 514.802. 
  3.25     A commission or compensation is considered earned on the 
  3.26  date that the payment of it is due under the lease or management 
  3.27  agreement. 
  3.28     (c) The notice of lien must be signed by the broker and 
  3.29  include the following information: 
  3.30     (1) the name and license number of the broker; 
  3.31     (2) the name of the owner or acquirer of the commercial 
  3.32  real estate that is subject to the lien; 
  3.33     (3) the legal description of the commercial real estate 
  3.34  that is subject to the lien; and 
  3.35     (4) the amount of the lien at the time the notice is filed. 
  3.36     (d) A broker shall mail a copy of the notice of lien to the 
  4.1   owner or acquirer of the commercial real estate that is subject 
  4.2   to the lien within 72 hours after the filing of the notice of 
  4.3   lien under this subdivision.  A lien under this section is 
  4.4   effective only from the date that it is perfected under this 
  4.5   subdivision. 
  4.6      (e) A lien that is perfected under this subdivision by a 
  4.7   broker secures all unpaid commissions or compensation that are 
  4.8   due that broker with respect to the commercial real estate 
  4.9   subject to that lien, regardless of whether the commission or 
  4.10  compensation was earned at the time the lien was filed. 
  4.11     Sec. 4.  [514.804] [PRIORITY AND SATISFACTION OF LIEN.] 
  4.12     Subdivision 1.  [PRIORITY.] A lien under this section has 
  4.13  priority over all other liens on the commercial real estate, 
  4.14  except tax and special assessment liens, liens under section 
  4.15  514.01, purchase money mortgages, liens that are filed or 
  4.16  recorded before the lien under this section is perfected, and 
  4.17  any other lien given priority under the law. 
  4.18     Subd. 2.  [SATISFACTION OF THE LIEN.] (a) Upon the request 
  4.19  of a person interested in the real estate that is the subject of 
  4.20  a lien under this section, the broker shall execute and deliver 
  4.21  a satisfaction of lien to the interested person if one of the 
  4.22  following conditions is met: 
  4.23     (1) the person owing the commission or compensation pays 
  4.24  the broker in full the amount specified in the notice of lien; 
  4.25     (2) the person owing the commission or compensation pays an 
  4.26  amount equal to 125 percent of the commission or compensation 
  4.27  owed into the trust account of the broker or the trust account 
  4.28  of any attorney who does not represent a party to the dispute.  
  4.29  The money must be held in escrow until disbursed pursuant to the 
  4.30  written mutual agreement of the parties or pursuant to a court 
  4.31  order; or 
  4.32     (3) if the parties to the contract or agreement giving rise 
  4.33  to the lien agree to binding arbitration regarding the disputed 
  4.34  commission or compensation and if the parties to the contract or 
  4.35  agreement, other than the broker, agree to pay all of the costs 
  4.36  of the arbitration. 
  5.1      (b) A broker is liable to a person requesting a lien 
  5.2   satisfaction under this subdivision for a sum equal to 50 
  5.3   percent of the amount claimed in the lien claim, if the broker 
  5.4   does not provide the requested satisfaction within 30 days of 
  5.5   the later of the following: 
  5.6      (1) the date on which the request is received by the 
  5.7   broker; 
  5.8      (2) if the satisfaction is required under paragraph (a), 
  5.9   clause (1), the date on which the broker receives payment in 
  5.10  full of the amount specified in the notice of lien; 
  5.11     (3) if the satisfaction is required under paragraph (a), 
  5.12  clause (2), the date on which the broker receives evidence that 
  5.13  the requirements under paragraph (a), clause (2), have been met; 
  5.14     (4) if the satisfaction is required under paragraph (a), 
  5.15  clause (3), the date on which the broker receives the agreement 
  5.16  to binding arbitration; or 
  5.17     (5) if the satisfaction is required under paragraph (a), 
  5.18  clause (3), the date on which the broker receives evidence of 
  5.19  payment of the arbitrator's fee. 
  5.20     Subd. 3.  [EXTINGUISHMENT OF LIEN.] A lien under this 
  5.21  section is extinguished if an action to enforce the lien is not 
  5.22  commenced within two years after the lien is perfected under 
  5.23  section 514.803, subdivision 2. 
  5.24     Sec. 5.  [EFFECTIVE DATE.] 
  5.25     This act applies to a commercial real estate listing 
  5.26  contract, a commercial real estate buyer agency agreement, or an 
  5.27  agreement for the lease or management of commercial real estate 
  5.28  entered into on or after August 1, 1999.