CHAPTER 62. BROKER'S AND APPRAISER'S LIEN ON COMMERCIAL REAL ESTATE
PROPERTY CODE
TITLE 5. EXEMPT PROPERTY AND LIENS
SUBTITLE B. LIENS
CHAPTER 62. BROKER'S AND APPRAISER'S LIEN ON COMMERCIAL REAL
ESTATE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 62.001. SHORT TITLE. This chapter may be cited as the
Broker's and Appraiser's Lien on Commercial Real Estate Act.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.002. APPLICABILITY. (a) This chapter applies only to
real estate that is commercial real estate on the date the notice
of lien is filed under this chapter.
(b) This chapter does not apply to:
(1) a transaction involving a claim for a commission of $2,500
or less in the aggregate; or
(2) a transaction for the sale of commercial real estate
involving a claim for a commission of $5,000 or less in the
aggregate if the commercial real estate:
(A) is the principal place of business of the record title
owner;
(B) is occupied by more than one and fewer than five tenants;
and
(C) is improved with 7,500 square feet or less of total gross
building area.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.003. DEFINITIONS. In this chapter:
(1) "Broker" means a person who:
(A) is licensed as a broker under Chapter 1101, Occupations
Code, and is not acting as a residential rental locator as
defined by Section 1101.002, Occupations Code; or
(B) is licensed or certified as a real estate appraiser under
Chapter 1103, Occupations Code.
(2) "Commercial real estate" means all real estate except:
(A) real estate improved with one to four residential units;
(B) a single-family residential unit, including a condominium,
townhouse, or home in a subdivision, if the unit is sold, leased,
or otherwise conveyed on a unit-by-unit basis and regardless of
whether the unit is part of a larger building or located on real
estate containing more than four residential units;
(C) real estate that is or includes on the real estate a
person's homestead;
(D) real estate that is not improved with a structure and is:
(i) zoned for single-family residential use; or
(ii) restricted for single-family use under restrictive
covenants that will remain in effect for at least the next two
years; or
(E) real estate that:
(i) is primarily used for farming and ranching purposes;
(ii) will continue to be used primarily for farming and ranching
purposes; and
(iii) is located more than three miles from the corporate
boundaries of any municipality.
(3) "Commission" includes a fee or other valuable consideration.
(4) "Commission agreement" means a written instrument that:
(A) entitles a broker to a commission;
(B) is signed by the person obligated to pay the commission or
that person's authorized agent;
(C) references the commission amount or describes the formula
used to determine the commission amount; and
(D) contains a description legally sufficient for identification
of the real estate interest that is the subject of the agreement
if the person obligated to pay the commission is a seller or
lessor.
(5) "Deferred commission" means a commission that is earned and
is not yet payable.
(6) "Real estate" has the meaning assigned by Section 1101.002,
Occupations Code.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.803,
eff. Sept. 1, 2003.
Sec. 62.004. PAYABLE COMMISSION AND EARNED COMMISSION. (a) A
commission is payable at the time provided in the commission
agreement. If payment of the commission is conditioned on the
occurrence of an event and that event does not occur, the person
obligated to pay the commission is not required to pay the
commission.
(b) Except as provided by Subsection (c), a commission is earned
on the earlier of the date that:
(1) an event occurs that, under the commission agreement,
defines when the commission is earned; or
(2) the person obligated to pay the commission enters into a
purchase contract or a lease during the period prescribed by the
commission agreement for all or part of the commercial real
estate if the purchase contract or lease is contemplated by the
commission agreement and if the parties to the purchase contract
or lease are contemplated by the commission agreement.
(c) If a broker has earned a commission under a commission
agreement relating to a lease transaction and the commission
agreement provides that the broker may receive an additional
commission when the lease is modified to expand the lease space
or renewed, the additional commission is earned when:
(1) the broker performs all the additional services relating to
the lease modification or renewal expressly prescribed by the
commission agreement; or
(2) the broker first earned a commission under the commission
agreement if the commission agreement does not expressly require
the broker to perform additional services relating to a lease
modification or renewal.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.005. BROKER'S ADDRESS FOR RECEIPT OF NOTICE. A seller,
lessor, buyer, or tenant shall send any notice required to be
sent to the broker under this chapter to the broker:
(1) at the broker's address as reflected in the records of the
Texas Real Estate Commission; and
(2) at the broker's last address that the broker furnished the
seller, lessor, buyer, or tenant by certified mail, return
receipt requested, if the broker's license is expired.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER B. BROKER'S LIEN
Sec. 62.021. PERSON ENTITLED TO LIEN. (a) A broker has a lien
on a seller's or lessor's commercial real estate interest in the
amount specified by the commission agreement if:
(1) the broker has earned a commission under a commission
agreement signed by the seller or lessor of the commercial real
estate interest or the seller's or lessor's authorized agent; and
(2) a notice of lien is recorded and indexed as provided by
Section 62.024.
(b) A broker has a lien on the commercial real estate interest
purchased by a prospective buyer in the amount specified by the
commission agreement if:
(1) the broker has earned a commission under a commission
agreement signed by the prospective buyer of the commercial real
estate interest or the prospective buyer's authorized agent; and
(2) a notice of lien is recorded and indexed as provided by
Section 62.024.
(c) A broker has a lien on the leasehold interest in the
commercial real estate that a prospective tenant leases in the
amount specified by the commission agreement if:
(1) the broker has earned a commission under a commission
agreement signed by the prospective tenant of the commercial real
estate interest or the prospective tenant's authorized agent; and
(2) a notice of lien is recorded and indexed as provided by
Section 62.024.
(d) A lien described by this section is available only to the
broker named in the commission agreement. The lien is not
available to an employee or independent contractor of the broker.
(e) The broker's right to claim a lien based on the commission
agreement must be disclosed in the commission agreement.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.022. WAIVER, RELEASE, OR DISCHARGE OF LIEN; ASSUMPTION
OF COMMISSION OBLIGATION. (a) Except as provided by Subsection
(b), the waiver of a broker's right to a lien under this chapter,
or a release given for the purpose of releasing the broker's lien
before the commission is satisfied or forgiven, is void.
(b) A broker's entitlement to a lien on the interest of an owner
or tenant in commercial real estate shall be automatically waived
if:
(1) the commission is earned and payable for services provided
relating to a lease transaction; and
(2) the commission agreement is included as a provision of the
lease agreement.
(c) A lien under this chapter is discharged by:
(1) a court order discharging the lien;
(2) paying the commission to the broker named in the commission
agreement; or
(3) establishing an escrow account described by Subchapter F.
(d) A person who assumes an owner's or tenant's commercial real
estate interest is bound by a commission agreement included in a
lease agreement unless an escrow account is established under
Subchapter F or a bond is provided under Subchapter G.
(e) This section does not affect the rights of a mortgagee who
forecloses on commercial real estate and does not assume the
lease on which a commission agreement is based.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.023. AFFIDAVIT IDENTIFYING BROKER. If requested by the
buyer, the buyer's authorized agent, or the escrow agent for the
commercial real estate transaction, the seller of commercial real
estate and the broker representing the seller shall provide to
the requesting party before the closing of the transaction a
written affidavit identifying each broker with whom the affiant
knows or believes the seller or the seller's authorized agent has
signed a commission agreement under which a commission is claimed
or earned and has not been paid.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.024. FILING OF NOTICE OF LIEN. (a) A broker claiming a
lien under this chapter may not file a notice of lien unless the
commission on which the lien is based is earned.
(b) A broker claiming a lien under this chapter must file a
notice of lien as provided by Subchapter C with the county clerk
of the county in which the commercial real estate is located.
(c) The county clerk shall record the notice of lien in records
kept for that purpose and shall index and cross-index the notice
of lien in the names of the broker, each person obligated to pay
the commission under the commission agreement, and each person
who owns an interest in the commercial real estate if the broker
claims a lien on that interest.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.025. CONTENTS OF NOTICE OF LIEN. The notice of lien
must be signed by the broker or by a person authorized to sign on
behalf of the broker and must contain the following:
(1) a sworn statement of the nature and amount of the claim,
including:
(A) the commission amount or the formula used to determine the
commission;
(B) the type of commission at issue, including a deferred
commission; and
(C) the month and year in which the commission was earned;
(2) the name of the broker and the real estate license number of
the broker;
(3) the name as reflected in the broker's records of any person
who the broker believes is obligated to pay the commission under
the commission agreement;
(4) the name as reflected in the broker's records of any person
the broker believes to be an owner of the commercial real estate
interest on which the lien is claimed;
(5) a description legally sufficient for identification of the
commercial real estate interest sought to be charged with the
lien;
(6) the name of any cooperating broker or principal in the
transaction with whom the broker intends to share the commission
and the dollar or percentage amount to be shared; and
(7) a copy of the commission agreement on which the lien is
based.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.026. NOTICE OF FILING. (a) In this section, "business
day" means a day other than a Saturday, Sunday, or holiday
recognized by this state.
(b) Not later than one business day after the date the broker
files a notice of lien, the broker shall mail a copy of the
notice of lien by certified mail, return receipt requested, or
registered mail to:
(1) the owner of record of the commercial real estate interest
on which the lien is claimed or the owner's authorized agent; and
(2) the prospective buyer or tenant and any escrow agent named
in a contract for the sale or lease of the commercial real estate
interest on which the lien is claimed if:
(A) a binding written contract for the sale or lease of the
commercial real estate interest is in effect between the owner
and the prospective buyer or tenant in a transaction that is the
basis for the commission; and
(B) the binding written contract was executed by the owner and
the prospective buyer or tenant before the date the notice of
lien is filed.
(c) Service of the notice under Subsection (b) is complete when
the notice is deposited in the United States mail, postage
prepaid, and addressed to the persons entitled to receive the
notice under this section.
(d) If the broker has actual knowledge of the identity of the
escrow agent named in the contract for the sale or lease of the
commercial real estate interest on which the broker claims a lien
or of the escrow agent otherwise closing the sale or lease of the
commercial real estate interest, the broker, before the first
business day before the date that the sale or lease is closed on
commercial real estate for which a notice of lien is filed, shall
deliver a file-stamped copy or transmit a facsimile of a
file-stamped copy of the notice of lien to each escrow agent at
the office in which the closing of the sale or lease will occur
for use during the closing of the sale or lease. The broker shall
deliver the copy or transmit the facsimile directly to the
individual escrow agent responsible for closing the sale or lease
if the broker knows that person's name.
(e) If the escrow agent receives the notice of lien, the escrow
agent and other parties to the sale or lease may not close the
transaction unless the lien is released, the prospective buyer or
tenant purchases or leases the property subject to the lien, the
funds are held in escrow as provided by Subchapter F, or a bond
is filed as provided by Subchapter G.
(f) If the broker fails to comply with this section, the notice
of lien is void.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.027. INCEPTION OF BROKER'S LIEN. (a) A broker's lien
attaches to the commercial real estate interest owned by the
person obligated to pay the commission on the date the notice of
lien is recorded as provided by this chapter. The lien does not
relate back to the date of the commission agreement.
(b) A notice of lien for amounts earned by the broker under an
installment contract or under a commission agreement for a
deferred commission is enforceable only to the extent that the
installment or commission has become payable.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.028. PRIORITY. (a) A recorded lien, mortgage, or other
encumbrance on commercial real estate, including a recorded lien
securing revolving credit and future advances for a loan,
recorded before the date a broker's lien is recorded has priority
over the broker's lien.
(b) A broker's lien on the commercial real estate interest of a
person obligated to pay a commission is not valid or enforceable
against a grantee, buyer, lessee, or transferee of the interest
of the person obligated to pay the commission if the deed, lease,
or instrument transferring the interest is recorded before the
notice of the broker's lien is recorded.
(c) A purchase-money mortgage lien executed by the buyer of the
commercial real estate interest has priority over a broker's lien
claimed for the commission owed by the buyer against the
commercial real estate interest purchased by the buyer.
(d) A mechanic's lien that is recorded after a broker's lien and
that relates back to a date before the date the broker's lien is
recorded has priority over the broker's lien.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.029. SUBORDINATION. (a) If the person obligated to pay
the commission sells that person's commercial real estate
interest, the broker's lien is subordinate to a recorded
purchase-money first lien authorized by the buyer if the buyer:
(1) executes and files with the county clerk of the county in
which the broker's lien is filed a memorandum that evidences the
buyer's acknowledgment of the existence of the broker's lien; and
(2) sends the broker, by certified mail, return receipt
requested, or registered mail, a copy of the recorded memorandum
required by this subsection.
(b) If the person obligated to pay the commission refinances a
recorded first lien secured by that person's commercial real
estate interest, the broker's lien is subordinate to the recorded
refinanced first lien, regardless of the amount of the first lien
after refinancing, if the person obligated to pay the commission:
(1) executes and files with the county clerk of the county in
which the broker's lien is filed a memorandum that evidences the
person's acknowledgment of the existence of the broker's lien;
and
(2) sends the broker, by certified mail, return receipt
requested, or registered mail, a copy of the recorded memorandum
required by this subsection.
(c) If the person obligated to pay the commission obtains an
extension of credit secured by that person's commercial real
estate interest, the broker's lien is subordinate to the lien
securing the extension of credit if, according to the loan
documents, the extension of credit is made only for the purpose
of:
(1) repairing or renovating the commercial real estate; or
(2) completing construction or providing additional improvements
on the commercial real estate.
(d) If the person obligated to pay the commission furnishes a
subordination agreement as provided by this section to be
executed by the broker, the broker must:
(1) execute and acknowledge the subordination agreement before a
notary public; and
(2) return the subordination agreement to the person not later
than the seventh day after the date the broker receives the
subordination agreement and other documents the broker reasonably
requests in order to determine that the subordination agreement
complies with this section.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.030. MIXED-USE REAL ESTATE. If real estate is zoned or
restricted for more than one use, the broker's lien attaches only
to the portions of the real estate that constitute commercial
real estate.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.031. CHANGE IN USE OF REAL ESTATE. (a) Except as
provided by Subsection (b), any change in the use of the real
estate does not affect a broker's lien if the notice of the lien
was filed when the real estate was commercial real estate.
(b) The broker's lien is extinguished if:
(1) not later than the 360th day after the date on which the
broker's commission is payable, the commercial real estate
interest on which a broker claims a lien is zoned for
single-family use or restricted for single-family use under
recorded restrictive covenants; and
(2) the zoning ordinances or restrictive covenants for
single-family use are in effect until at least the second
anniversary of the date the commission is payable.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER C. TIME FOR FILING NOTICE OF LIEN
Sec. 62.041. TIME TO FILE. (a) If a broker has earned a
commission under a commission agreement signed by a seller or the
seller's authorized agent, a broker must record a notice of lien:
(1) after the commission is earned; and
(2) before the conveyance of the commercial real estate interest
on which the broker is claiming a lien.
(b) If a broker has earned a commission under a commission
agreement signed by a prospective buyer or a prospective buyer's
authorized agent, the broker must record a notice of lien:
(1) after the buyer acquires legal title to the commercial real
estate interest on which the broker is claiming a lien; and
(2) before the buyer conveys the buyer's commercial real estate
interest on which the broker is claiming a lien.
(c) If the lien is based on a lease transaction, the broker must
record a notice of lien after the commission is earned and before
the earlier of:
(1) the 91st day after the date the event for which the
commission becomes payable occurs; or
(2) the date the person obligated to pay the commission records
a subsequent conveyance of that person's commercial real estate
interest after executing the lease agreement relating to the
lease transaction for which the lien is claimed.
(d) If a notice of lien is not filed within the time required by
this section, the lien is void.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER D. ENFORCEMENT OF LIEN
Sec. 62.061. SUIT TO FORECLOSE LIEN. (a) A broker may not
bring a suit to foreclose a lien under this chapter unless the
commission is earned and payable. A broker may bring a suit to
foreclose a lien in any district court for the county in which
the commercial real estate is located by filing a sworn complaint
stating that the notice of lien has been recorded.
(b) A complaint in a suit filed under this section must contain:
(1) a brief description of the commission agreement that is the
basis for the lien, including:
(A) a description of the disclosure of the broker's right to the
lien contained in the commission agreement;
(B) the date on which the commission agreement was executed;
(C) the event for which a commission is considered to be earned;
and
(D) the event for which a commission is considered to be
payable;
(2) a description of the services performed by the broker;
(3) the amount of the payable commission that is unpaid;
(4) a description of the commercial real estate to which the
lien attaches; and
(5) other facts necessary for a full understanding of the rights
of the parties.
(c) The broker must include as a defendant in a suit brought
under this subchapter each person the broker believes to have an
interest in the commercial real estate that is subordinate to or
encumbered by the broker's lien.
(d) If the broker and a person against whom the broker claims a
commission use alternative dispute resolution procedures to
resolve a dispute concerning entitlement to the broker's
commission, the broker's lien remains valid, and any suit to
foreclose the lien is stayed until the alternative dispute
resolution process is completed.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.062. STATUTE OF LIMITATIONS. (a) Except as provided by
this section, a broker claiming a lien under this chapter must
bring a suit to foreclose the lien on or before the second
anniversary of the date the notice of lien is recorded.
(b) A broker claiming a lien to collect a deferred commission
must bring a suit to foreclose the lien on or before the earlier
of:
(1) the second anniversary of the date on which the commission
is payable; or
(2) the 10th anniversary of the date the lien is recorded or the
10th anniversary of the date the broker records a subsequent
notice of the lien as a renewal of the broker's right to the
lien, whichever date is later.
(c) A renewal of a notice of lien must state that it is a
renewal of the broker's lien and must be recorded after the ninth
anniversary after the date the original notice of lien or last
renewal notice is recorded and on or before the 10th anniversary
of the date the original notice of lien or last renewal notice is
recorded.
(d) A broker claiming a lien for a commission that is payable
must bring a suit to foreclose the lien not later than the 30th
day after the date the broker receives a written demand to bring
a suit to foreclose the lien from the owner of the commercial
real estate interest on which the lien is claimed.
(e) If a suit to foreclose the lien is not brought within the
period prescribed by this section, the lien is void.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.063. ASSESSMENT OF COSTS, FEES, AND INTEREST. The
prevailing party in a suit brought under this subchapter is
entitled to court costs, reasonable attorney's fees, and
prejudgment interest from the date the commission becomes payable
or the date the damage accrues.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER E. RELEASE OF LIEN
Sec. 62.081. RELEASE OF LIEN. (a) Not later than the fifth day
after the date a broker receives a written request from the owner
of a commercial real estate interest on which a lien is claimed,
the broker shall furnish to the owner a release of indebtedness
and any lien claimed if:
(1) the debt that is the basis for the lien is satisfied; or
(2) the lien is discharged under Section 62.022, rendered void
under Section 62.026 or 62.062, or extinguished under Section
62.031.
(b) When a condition occurs that would preclude the broker from
receiving a commission under the terms of the commission
agreement that is the basis for the lien, the broker shall, not
later than the 10th day after the date the broker receives a
written request from the owner of the commercial real estate
interest on which the lien is claimed, furnish to the owner a
release of indebtedness and any lien claimed.
(c) Not later than the 10th day after the date a broker receives
a written request for the release of the broker's lien from the
escrow agent responsible for closing the purchase and sale of a
commercial real estate interest on which the lien is claimed, the
broker shall furnish to the escrow agent a release of
indebtedness and any lien claimed if:
(1) the commercial real estate interest to which the lien
attaches is subject to a contract for purchase and sale;
(2) the release of indebtedness and any lien claimed is
conditioned on the closing of the transaction; and
(3) the broker would otherwise be obligated to release the
indebtedness and any lien claimed under Subsection (a) or (b) on
the closing of the transaction.
(d) A release of lien must be in a form that permits the
instrument to be filed of record.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER F. ESCROW OF DISPUTED AMOUNTS
Sec. 62.101. ESCROW ACCOUNT. If a claim for a lien under a
recorded notice of lien is not paid or assumed at the closing of
a sale, lease, or mortgage of the commercial real estate interest
subject to the lien and would prevent the closing of the
transaction or conveyance or if a claim for a lien under a
recorded notice of lien does not survive the closing, any person
named in the notice of lien as obligated to pay the commission
shall, on the date of the closing:
(1) establish an escrow account from any net proceeds of the
transaction or conveyance in an amount equal to the amount
sufficient to satisfy the lien plus 15 percent of that amount; or
(2) file a bond to indemnify against the lien as provided by
Subchapter G.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.102. NAMED ESCROW AGENT. If an escrow agent is named in
the contract on which the transaction or conveyance is based, the
escrow account shall be established with the named escrow agent.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.103. COSTS OF INTERPLEADER. Related costs for any
interpleader action may be deducted from the escrow account by
the person maintaining the escrow account.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.104. REFUSAL TO ESTABLISH ESCROW ACCOUNT OR BOND. (a)
A party may not refuse to close a transaction because of the
requirement to establish an escrow account or bond as provided by
Section 62.101 if:
(1) the broker provides a copy of the notice of lien that
complies with Sections 62.025 and 62.026;
(2) sufficient proceeds will result from the proposed
transaction for the payment of the commission and costs of the
interpleader; and
(3) the broker executes and delivers a full release of the
broker's lien in a recordable form.
(b) A prospective buyer of a commercial real estate interest may
not refuse to close the purchase solely because a broker's lien
is filed after the date a title commitment or abstract of title
relating to the interest is issued if an escrow account is
established as provided by this subchapter or a bond is filed as
provided by Subchapter G.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.105. TERM OF ESCROW ACCOUNT. The amount held in escrow
shall be held in escrow until:
(1) the rights of the parties claiming the amount in escrow are
determined by a written agreement of the parties, a court order,
or an alternative dispute resolution process agreed to by the
parties;
(2) the broker's lien is no longer enforceable; or
(3) the funds are interpled into a district court for the county
in which the commercial real estate is located.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.106. EXTINGUISHMENT OF LIEN UPON ESCROW. When the
escrow account is established under this subchapter, the broker's
lien against the commercial real estate is extinguished and
becomes a lien on the proceeds in the escrow account.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER G. BOND TO INDEMNIFY AGAINST LIEN
Sec. 62.121. BOND. (a) If a lien is fixed or is attempted to
be fixed by a recorded instrument under this chapter, any person
may file a bond to indemnify against the lien.
(b) The bond shall be filed with the county clerk of the county
in which the commercial real estate subject to the lien is
located.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.122. BOND REQUIREMENTS. The bond must:
(1) describe the commercial real estate on which the lien is
claimed;
(2) refer to the lien claimed in a manner sufficient to identify
it;
(3) be in an amount that is double the amount of the lien
referred to in the bond as of the date of execution of the bond
by the surety, unless the total amount claimed in the lien
exceeds $40,000, in which case the bond must be in an amount that
is 1-1/2 times the amount of the lien;
(4) be payable to the party claiming the lien;
(5) be executed by:
(A) the party filing the bond as principal; and
(B) a corporate surety licensed by this state to execute the
bond as surety;
(6) be conditioned substantially that the principal and sureties
will pay the named obligees or their assignees the amount that
the named obligees would have been entitled to recover if their
claim had been proved to be valid and enforceable liens on the
commercial real estate; and
(7) identify the last known mailing address of the person
claiming the lien.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.123. NOTICE OF BOND. (a) After the bond is filed, the
county clerk shall issue notice of the bond to all named
obligees.
(b) A copy of the bond must be attached to the notice.
(c) The notice must be served on each obligee by mailing a copy
of the notice and the bond to the obligee by certified mail,
return receipt requested, addressed to the claimant at the
address stated in the bond for the obligee.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.124. RECORDING OF BOND AND NOTICE. (a) The county
clerk shall record the bond, the notice, and a certificate of
mailing in the real property records.
(b) In acquiring an interest in or insuring title to the
commercial real estate, a buyer, insurer of title, or lender may
rely on and is absolutely protected by the record of the bond and
the notice to the same extent as if the lien claimant had filed a
release of lien in the real property records.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
Sec. 62.125. ACTION ON BOND. (a) A party making or holding a
lien claim may not sue on the bond later than the last date on
which a person may bring a suit to foreclose the lien under
Section 62.062.
(b) The bond is not exhausted by one action against it. Each
named obligee or assignee of an obligee may maintain a separate
suit on the bond in any district court for the county in which
the commercial real estate is located.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.
SUBCHAPTER H. REMEDIES
Sec. 62.141. OWNER'S OR TENANT'S REMEDIES. (a) An owner or
tenant may file suit against a broker under this chapter.
(b) In an action filed under this section, the court shall
discharge a broker's lien if the broker:
(1) failed to mail a copy of the notice of lien within the
period prescribed by Section 62.026;
(2) failed to execute, acknowledge, and return a subordination
agreement within the period prescribed by Section 62.029(d);
(3) failed to record the notice of lien within the period
prescribed by Section 62.041; or
(4) failed to release a lien within the period prescribed by
Section 62.081.
(c) A broker is liable to an owner or tenant for damages as
provided by Subsection (d) if:
(1) the broker recorded a lien on the commercial real estate
interest of the owner or tenant;
(2) the broker failed to:
(A) execute, acknowledge, and return a subordination agreement
within the period prescribed by Section 62.029(d); or
(B) release a lien within the period prescribed by Section
62.081;
(3) the owner, tenant, or escrow agent mailed to the broker by
certified mail, return receipt requested, a copy of this section
and a notice requesting the broker to execute, acknowledge, and
return the subordination agreement or release the lien not later
than the 10th day after the date the broker receives the notice;
and
(4) the broker failed to comply with the owner's, tenant's, or
escrow agent's written notice within the prescribed period.
(d) If the court finds that a broker is liable to an owner or
tenant under Subsection (c), the court may award the owner or
tenant:
(1) actual damages, including attorney's fees and court costs,
incurred by the owner or tenant that are proximately caused by
the broker's failure to execute, acknowledge, and return the
subordination agreement or release the lien; and
(2) a civil penalty in an amount not to exceed three times the
amount of the claimed commission if the court finds that the
broker acted with gross negligence or acted in bad faith in
violation of Chapter 1101, Occupations Code.
(e) This section does not prevent:
(1) a person from filing a complaint with the Texas Real Estate
Commission against a broker who fails to comply with this
chapter; or
(2) the Texas Real Estate Commission at any time from
investigating or initiating a disciplinary proceeding against a
broker who fails to comply with this chapter.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.804,
eff. Sept. 1, 2003.
Sec. 62.142. BROKER'S REMEDIES. (a) A broker may file suit
against an owner or tenant to enforce a commission agreement.
(b) If the court finds that the broker waived the right to file
a lien under Section 62.022 and that the owner or tenant violated
the commission agreement, the court may award to the broker:
(1) actual damages, including attorney's fees and court costs,
that are proximately caused by the owner's or tenant's failure to
comply with the commission agreement; and
(2) a civil penalty in an amount not to exceed three times the
amount of the claimed commission if the court finds that the
owner or tenant acted with gross negligence or in bad faith.
Added by Acts 1999, 76th Leg., ch. 1571, Sec. 1, eff. Aug. 30,
1999.