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Lyman J. (Greg) Gregory, III



90 Southside Avenue,

Ste 100

Asheville, NC 28801

90 Southside Avenue Suite 100


90 Southside Avenue Suite 100

A Legal Moment

Broker's Lien


        On October 1, 2011, a new law titled "Commerical Real Estate Broker Lien Act" became effective in North Carolina.  Briefly, the law allows licensed real estate brokers to protect their commissions by filing liens against commercial real property that is the subject of written brokerage agreements signed on or after October 1, 2011.  Read on for the details.

        First, the lien is available only against commercial real estate.  In general, the law defines such real estate as any real property "used primarily for sales, office, research, institutional, warehouse, manufacturing, industrial, or mining purposes or for multifamily residential purposes involving five or more dwelling units."  Property meeting certain zoning requirements or intended for certain uses may also be subject to liens.

         Second, the lien is available only when there is a written agreement between a licensed broker and the owner of the property that sets forth the broker's duties to the owner, sets forth the conditions upon which the broker earns compensation, and states the amount of compensation.

        Third, the broker must create the lien by filing it within certain time guidelines.  A broker may file a lien after she has completed her performance under the brokerage agreement, which, under most agreements, will mean finding a ready, willing, and able buyer.  The broker must file the lien prior to the conveyance of the real property being liened.  Also, the broker may not file the lien earlier than 30 days before closing, unless the owner has breached the written brokerage agreement.

        Fourth, the broker must file and deliver the lien properly.  The lien must include the name of the broker claiming the lien, the name of the owner, a description of the real property being liened, the amount of the lien and whether it is due in installments, the broker's grounds for the lien including a reference to the written agreement on which the lien is based, an attestation that the statements in the lien are true, and the broker's signature.  The lien must be filed with the Clerk of  Court, and delivered by certified mail, return receipt requested, or by other legal service of process. The proof of service must also be filed with the Clerk.

        Fifth, filing the lien is not enough to compel payment.  If the  broker does not commence a lawsuit to enforce the lien within 18 months of filing it, the lien is lost.

        I have covered the basics of the new Commercial Real Estate Broker Lien Act.  There are numerous subtleties and additional requirements in the act that I do not have space to cover here.  If you find yourself in a situation where your commission is in jeopardy on a commercial closing, I suggest you consult this new law with reference to the specific facts of your situation.  You will also have to judge the impact of pursuing a lien on the relationship you have with your client.  I hope your closings continue to go smoothly without the need of resorting to liens.      




Do not hesitate to contact me to receive more information on this topic or to suggest topics for future editions of 'A Legal Moment'. You may not rely on this content as legal advice for any specific situation, but should instead contact an attorney for specific advice.

Marshall, Roth & Gregory, P.C. • 90 Southside Avenue Suite 100 • Asheville, NC 28801
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