§ 34-49-3 — § 34-49-3. Broker's lien.

§ 34-49-3. Broker's lien.

(a) Any real estate broker shall have a lien upon commercial real estate or any interest in that commercial real estate which is the subject of a purchase, lease or other conveyance to a buyer or tenant (which transferee includes without limitation subtenant and assignee) of an interest in the commercial real estate, in the amount of compensation that the real estate broker is due for licensed services, which compensation shall include without limitation, brokerage fees, consulting fees, and management fees:

(1) Under a written instrument which is executed either by the owner of an interest in the commercial real estate or by the owner's authorized agent; or

(2) Under a written instrument executed by a prospective buyer or prospective tenant or its respective authorized agent.

The lien shall be available to the real estate broker named or referred to in the agreement or instrument signed by the owner, buyer, or tenant (or their respective agents) and not to an employee or independent contractor employed by or affiliated with the real estate broker.

(b) A lien under this chapter shall attach to the commercial real estate or any interest in the commercial real estate upon:

(1) The real estate broker being entitled to compensation under a written instrument signed by the owner, buyer, tenant, or their authorized agent, as applicable; and

(2) Except as provided in subsections (c), (d), (e), or (f) below, the real estate broker recording a notice of lien in the land evidence records for the municipality in which the commercial real estate or any interest in the commercial real estate is located, prior to the recording of an actual instrument of conveyance or transfer of legal title to the commercial real estate against which the real estate broker claims a lien by the party from whom compensation is claimed. The lien shall attach as of the date of the recording of the notice of lien and does not and shall not relate back to the date of the written agreement. If a notice of lien is recorded after the date of recording of an instrument conveying or transferring legal title to the commercial real estate from the party from whom compensation is claimed, then such notice of lien shall not constitute a lien on the interest in commercial real estate held by the transferee.

(c) Except as provided in subsections (d), (e), or (f) when payment to a real estate broker is due in installments, a portion of which is due only after the conveyance or transfer of the commercial real estate or interest therein, any notice of lien for those payments due after the transfer or conveyance may be recorded at any time which is subsequent to the transfer or conveyance of the commercial real estate or interest therein or which time is within ninety (90) days of the date on which the payment is due. Such notice of lien shall only be effective as a lien against the transferor's interest in the commercial real estate to the extent funds are owed to the transferor by the transferee, but the lien shall be effective as a lien against the transferee's interest in the commercial real estate without limitations described above in this section. A single claim for lien recorded prior to transfer or conveyance of the commercial real estate or interest therein claiming all compensation due in installments shall also be valid and enforceable as it pertains to payments due after the transfer or conveyance; provided however, that as payments or partial payments of compensation are received, the real estate broker shall provide partial releases therefor, thereby reducing the amount due the real estate broker under its lien.

(d) In the case of a lease (which shall also include a sublease or assignment of lease), the notice of lien must be recorded not later than ninety (90) days after the tenant occupies the leased premises. Provided, however, that if the landlord serves written notice of the intended execution of the lease by personal service on the real estate broker entitled to claim a lien, at least ten (10) days prior to the date of the intended execution of the lease, the notice of lien must be recorded before the date indicated in such notice for the execution of the lease. The lien shall attach as of the recording of the notice of lien and does not and shall not relate back to the date of the written agreement.

(e) If a real estate broker may be due any compensation excluding compensation due upon execution of the initial lease, such as compensation arising from and including, but not limited to, the exercise of an option: (1) To expand leased premises; (2) To renew or extend a lease; or (3) To purchase commercial real estate; which compensation is due, pursuant to a written agreement or instrument signed by the then owner or tenant (collectively "future commissions�), then the real estate broker may record its notice of lien at any time after execution of the lease or other written agreement which contains such rights, but not later than ninety (90) days after the occurrence of the act or event on which the future commission is claimed. An action to enforce a lien to collect future commissions must be commenced within two (2) years of the act or event for which the future commission is claimed.

(f) In the event that the commercial real estate is sold or otherwise conveyed prior to the date on which a future commission is due, if the real estate broker has recorded a valid notice of lien prior to the sale or other conveyance of the commercial real estate, then the purchaser or transferee shall be deemed to have notice of and shall take title to the commercial real estate subject to the notice of lien. Provided, however, that if a real estate broker claiming a future commission fails to record its notice of lien for future commission prior to the recording of a deed conveying legal title to the commercial real estate to the purchaser or transferee for consideration, then such real estate broker may not claim a lien on the commercial real estate, and any notice of lien recorded subsequent to the recording of such deed shall not constitute a lien on the commercial real estate and shall be null and void and of no effect.

(g) If a real estate broker claims compensation based on a written instrument executed by a prospective buyer or tenant or agent as described in subdivision (a)(2) of this section, then the notice of lien shall attach upon the prospective buyer or tenant purchasing or otherwise accepting a conveyance or transfer of the commercial real estate or interest therein and the recording of a notice of lien by the real estate broker in the land evidence records in which the commercial real estate, or any interest in the commercial real estate is located, within ninety (90) days after the recording of the deed or other instrument for the purchase or other conveyance or transfer to the buyer or within ninety (90) days of such tenant occupying the leased premises in the case of a lease or sublease transaction. The lien shall attach as of the date of the recording of the notice of lien and does not and shall not relate back to the date of the written agreement.

(h) The real estate broker shall, within ten (10) days of recording its notice of lien, either personally serve, deliver to, or mail a copy of the notice of lien by registered or certified mail, return receipt requested, to the owner of record or to the agent of the owner of record at: (1) The address of the owner stated in the written instrument on which the claim for lien is based; or (2) If no such address is given, then to the address where the real estate tax bill(s) are sent for the commercial real estate on which the claim of the lien is based; or (3) To the address of the property. Mailing of the copy of the notice of lien is effective when deposited in a United States mailbox with postage prepaid.

(i) A real estate broker may bring suit to enforce a lien in the superior court for the county where the commercial real estate is located by filing a complaint and sworn affidavit that the notice of lien has been recorded.

(j) A real estate broker claiming a lien shall, within two (2) years after recording the notice of lien, commence proceedings by filing a complaint and recording a notice of lis pendens in the land evidence records in the municipality in which the commercial real estate is located. Failure to commence proceedings as required herein within two (2) years after recording the notice of lien shall extinguish the lien.

(k) A real estate broker claiming a lien based upon an option or other right to purchase or lease shall, within two (2) years after the transfer or conveyance of the commercial real estate under the exercise of the option to purchase or lease, commence proceedings by filing a complaint and recording a notice of lis pendens in the land evidence records in the municipality in which the commercial real estate is located.

(l) Failure to commence proceedings within the time limits set forth herein shall extinguish the lien.

(m) A complaint under this section shall contain a brief statement or description of the agreement, contract, or instrument on which the notice of lien was filed, the date when the agreement, contract or instrument was made, a description of the services performed, the amount of compensation due and unpaid, a description of the commercial real estate which is subject to the notice of lien, and other facts reasonably necessary to describe the rights of the parties. The plaintiff shall make all interested parties of whose interest the plaintiff real estate broker is notified or has knowledge defendants to the action, and shall issue summons and provide service as in other civil action. When any defendant resides outside or has left the state, or on inquiry cannot be found, or is concealed within the 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 condition as in other civil actions. Failure of the plaintiff to provide proper summons or notice shall be grounds for judgment against the plaintiff and in favor of the defendant which is not properly served with summons or notice. All liens claimed under this chapter shall be foreclosed as provided in chapter 27 of this title.

(n) The notice of lien shall state the name of the claimant, the name of the legal title owner of the commercial real estate, a legal description of the commercial real estate upon which the lien is claimed, the amount for which the lien is claimed, and the number of the real estate broker's license. The notice of lien shall recite that the information contained in notice is true and accurate to the knowledge of the signator. The notice of lien shall be executed by the real estate broker or by a person authorized to execute on behalf of the real estate broker and shall be verified. A notice of lien substantially in the following form shall be deemed to comply with the foregoing requirements:

NOTICE OF COMMERCIAL REAL

ESTATE BROKER LIEN

LAND EVIDENCE RECORDS

XXX

Broker-Claimant,

vs.

XXX,

Owner

Notice is hereby given that the undersigned Broker-Claimant, whose real estate license number is ....................................... , and whose business address is ....................................................................... , makes the following statement and claims a Commercial Real Estate Broker Lien under the law entitled "Commercial Real Estate Broker Lien Act,� chapter 34-49 states:

(1) ....................................................................... , ....................................................................... , Rhode Island ....................................................................... , Plat and Lot Number, ....................................................................... and which is legally described on Exhibit A attached hereto is improved with a commercial building. The record owner of the Property ("Owner�) is ....................................... and ....................................... as Tenant/Sublessor.

(2) There is a written agreement to which the Tenant/Sublessor of the Property, is a party by which Tenant/Sublessor is obligated to pay Broker-Claimant a commission.

(3) That the Broker-Claimant by its sponsored licensee(s) provided services for said Tenant/Sublessor and is in compliance with Broker-Claimant's obligations under a written agreement to which Tenant/Sublessor is a party;

(4) That the amount of the commission or fee to which Broker-Claimant is entitled is $....................................... ; and

(5) Broker-Claimant now claims a lien on the Property and all improvements thereon and against all persons interested therein in the sum of ....................................... and 00/100 ($....................................................................... ).

By: .......................................


Its Authorized Agent

STATE OF RHODE ISLAND

COUNTY OF .......................................

....................................... as agent for ....................................... , being first duly sworn on his/her oath, deposes and states that he/she has read the foregoing Lien Notice for Commercial Real Estate Broker Lien and knows the contents thereof and that all the Statements therein contained are true and accurate to the knowledge of the undersigned.

Subscribed and sworn to before me this

........... day of ..................... , ........... .

.......................................................................

Notary Public

My commission expires:

Prepared by:		ATTY
		FIRM
		ADDRESS
		PHONE
Return to:		ATTY
		FIRM
		ADDRESS
		PHONE

(o) Whenever a notice of lien has been filed with the office of the applicable land evidence records and a condition occurs which would preclude the real estate broker's right to compensation under the terms of the written instrument on which the lien is based, the real estate broker shall provide to the owner of record of the commercial real estate, within ten (10) days following written demand by such owner of record, a recordable written release or satisfaction of the notice of lien.

(p) Upon written demand of the owner, hence, or other authorized agent of the owner or lienee, which demand shall be served on the real estate broker claiming the lien requiring suit to be commenced to enforce the lien or answer to be filed in pending suit, a suit shall be commenced or answer filed within thirty (30) days after actual receipt thereof or the lien shall be extinguished. Service of such written demand may be made by registered or certified mail, return receipt requested, or by personal service.

(q) Whenever a notice of lien has been recorded with the land evidence records and such claimed commission has been paid to the real estate broker claiming the lien, or where there is failure to institute a suit to enforce the lien within the time provided by this chapter, the real estate broker shall acknowledge satisfaction or release of the notice of lien in writing, on written demand of the owner within five (5) days after payment or within five (5) days of expiration of the time in which the complaint was to be filed.

(r) If the real estate broker and the party or parties from whom the commission is claimed agree to alternative dispute resolution ("ADR�), the claim shall be heard and resolved in the forum on which these parties have agreed. The court before which the lien enforcement proceeding is brought shall retain jurisdiction to enter judgment on the award or other result made or reached in ADR on all parties to the foreclosure. The real estate broker's notice of lien shall remain on record and the enforcement proceeding shall be stayed during the pendency of the ADR process.

(s) The cost of proceedings brought under this chapter including in trial, appellate courts, and ADR proceedings including reasonable attorney's fees, costs, and prejudgment interest, costs, and fees shall be equitably apportioned by the court or ADR tribunal among the responsible parties.

(t) Except for a waiver or release of lien provided in consideration of payment of the fee claimed by the real estate broker, or pursuant to subsections (o) and (q) above, and waiver of a real estate broker's right to lien commercial real estate under this chapter, or any other waiver or release of lien shall be void.

(u) The foregoing provisions of this subsection shall not limit or otherwise affect claims or defenses or other remedies a real estate broker, owner, or any other party may have in law or in equity.

Legislative History

P.L. 2013, ch. 69, § 1; P.L. 2013, ch. 76, § 1.