§ 10-115 — Business broker lien

Illinois § 10-115

• Jurisdiction: Illinois
• Topic: BUSINESS AND EMPLOYMENT
• Ch. 815: BUSINESS TRANSACTIONS
• Act 815 ILCS 307/: Illinois Business Brokers Act of 1995.
• Art.: Article 10 -

Text

(a) Any business broker shall have a lien upon the tangible assets of a business located in this State that is the subject of a business broker's written contract in the amount due to the broker under the written contract. (b) The lien shall be available to the business broker named in the instrument signed by the owner of an interest in the assets. The lien arising under this Act shall be in addition to any other rights that a business broker may have. (c) A lien under this Act does not attach unless and until: (1) the business broker is otherwise entitled to a fee or commission under a written contract signed by the seller or its duly authorized agent; and (2) before the actual conveyance or transfer of the business assets or property with respect to which the business broker is claiming a lien, the business broker files a notice of lien (i) as to real property, with the recorder of the county in which the real property is located or (ii) as to tangible personal property, in the Office of the Secretary of State. (d) When payment to a business broker is due in installments, a portion of which is due only after the conveyance or transfer of the tangible assets, any claim for lien for those payments due after the transfer or conveyance may be filed at any time subsequent to the transfer or conveyance of the tangible assets and prior to the date on which the payment is due but shall only be effective as a lien against the tangible assets to the extent moneys are still owed to the transferor by the transferee. In all other respects, the lien shall attach as described in this subsection. (e) If a business broker has a written agreement with a prospective purchaser, then the lien shall attach upon the prospective purchaser purchasing or otherwise accepting a conveyance or transfer of the real property or tangible personal property of the business and the filing of a notice of lien (i) in the recorder's office of the county in which the real property is located, as to real property, and (ii) in the Office of the Secretary of State, as to tangible personal property, by the business broker within 90 days after the transfer to the purchaser. The lien shall attach to the interest purchased by the purchaser as of the date of the filing of the notice of lien and does not relate back to the date of the written contract. (f) The business broker shall, within 10 days after filing its notice of lien, mail a copy of the notice of lien to the owner of the property by depositing it in the United States mail, registered or certified mail, with return receipt requested, or personally serve a copy of the notice on the owner of record or his agent. Mailing of the copy of the notice of claim for lien is effective if mailed to the seller at the address of the business that is the subject of the notice of lien or to another address that the seller or purchaser has provided in writing to the business broker. The broker's lien shall be unenforceable if mailing of the copy of the notice of lien does not occur at the time and in the manner required by this Act. (g) A business broker may bring suit to enforce a lien in the circuit court (i) in the county where the real property is located, as to real property, or (ii) as to tangible personal property, either in the county where the personal property is located or where the principal office of the owner of the personal property, or the owner's residence, is located, by filing a complaint and sworn affidavit that the lien has been filed. (h) The person claiming a lien shall, within 2 years after filing the lien, commence proceedings by filing a complaint. Failure to commence proceedings within 2 years after filing the lien shall extinguish the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings under this Act. (i) A complaint under this Section shall have attached to it a copy of the written contract on which the lien is founded and shall contain a description of the services performed, the amount due and unpaid, a description of the tangible assets of the business that are subject to the lien, and other facts necessary for a full understanding of the rights of the parties. The plaintiff shall make all interested parties, of whose interest the plaintiff is notified or has actual or constructive knowledge, defendants to the action and shall issue summons and provide service as in other civil actions. When any defendant resides or has gone out of the State, or on inquiry cannot be found, or is concealed within this State so that process cannot be served on that defendant, the plaintiff shall cause a notice to be given to that defendant, or cause a copy of the complaint to be served upon that defendant, in the manner and upon the same conditions as in other civil actions. Failure of the plaintiff to provide proper summons or notice shall be grounds for judgment against the plaintiff with prejudice. Every lien claimed under this Act shall be foreclosed as provided in the Illinois Mortgage Foreclosure Law, if the lien is on real property, or as provided in the Uniform Commercial Code, if the lien is on personal property. (j) The lien notice shall state the name and address of the claimant, the name of the purchaser or seller whose property or assets are subject to the lien, a description of the real or personal property that is subject to the lien, the amount for which the lien is claimed, and the registration number of the business broker. The notice of lien shall recite that the information contained in the notice is true and accurate to the knowledge of the signer. The notice of lien shall be signed by the business broker or by a person authorized to sign on behalf of the business broker and shall be verified. (k) Whenever a claim for lien has been filed with the Office of the Secretary of State or the county recorder's office and a condition occurs that would preclude the business broker from receiving compensation under the terms of the business broker's written agreement, the business broker shall provide to the purchaser of the business, if the lien is filed against the purchaser's assets of the business that are subject to this Act, or the seller of the business, if the lien is filed against the seller's assets of the business that are subject to this Act, within 10 days following demand by that party, a written release or satisfaction of the lien. (l) Upon written demand of the owner, lienee, or other authorized agent, served on the person claiming the lien requiring suit to be commenced to enforce the lien or answer to be filed in a pending suit, a suit shall be commenced or answer filed within 30 days thereafter, or the lien shall be extinguished. Service may be by registered or certified mail, return receipt requested, or by personal service. (m) If a claim for lien has been filed with the Office of the Secretary of State or the county recorder's office and is paid, the business broker shall acknowledge satisfaction or release of the lien, in writing, within 5 days after payment. (n) The cost of proceedings brought under this Act, including reasonable attorneys' fees, costs, and prejudgment interest due to the prevailing party, shall be borne by the nonprevailing party or parties. When more than one party is responsible for costs, fees, and prejudgment interest, the costs, fees, and prejudgment interest shall be equitably apportioned by the court among those responsible parties. (o) Prior recorded liens and mortgages shall have priority over a broker's lien. A prior recorded lien shall include, without limitation, (i) a mechanic's lien claim, (ii) prior recorded liens securing revolving credit or future advances under construction loans as described in Section 15-1302 of the Code of Civil Procedure, and (iii) prior recorded liens perfected under the Uniform Commercial Code. (p) No lien under this Section 10-115 shall attach to any real property asset of a business unless and until a notice of lien is filed with the recorder of the county in which the real property asset is located. A lien recorded under this subsection (p) shall otherwise be subject to the same notice, enforcement, and limitations as any other lien under this Section. A copy of the notice of lien recorded under this subsection (p) shall be filed with the Secretary of State.

Legislative History

(Source: P.A. 91-194, eff. 7-20-99; 91-534, eff. 1-1-00; 92-16, eff. 6-28-01.)