Senate Bill No. 268-Senators Shaffer, Schneider, Titus,
Regan, Coffin and Townsend
April 3, 1997
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Referred to Committee on Commerce and Labor
SUMMARY--Provides for real estate broker's lien. (BDR 9-397)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to real property; providing a lien for a real estate broker upon commercial real estate; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Chapter 108 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 20, inclusive, of this act.
Sec. 2 As used in sections 2 to 20, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 3 to 7, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 3 "Brokerage agreement" has the meaning ascribed to it in NRS 645.005.
Sec. 4 "Commercial real estate" means any real estate located in Nevada. The term does not include:
1. Real estate containing not more than four residential units;
2. Real estate classified as agricultural for assessment;
3. A single-family residential unit, including a condominium, townhouse or home within a subdivision, if such a unit is sold, leased or otherwise conveyed unit by unit, even if the unit is part of a larger building or parcel of real estate containing more than four residential units.
Sec. 5 "Interest in commercial real estate" includes an interest in a land trust.
Sec. 6 "Real estate" has the meaning ascribed to it in NRS 645.020.
Sec. 7 "Real estate broker" has the meaning ascribed to it in NRS 645.030.
Sec. 8 1. A real estate broker has a lien upon commercial real estate or any interest in commercial real estate in the amount due him under a written brokerage agreement signed by:
(a) The owner of an interest in the real estate or the owner's agent; or
(b) A prospective buyer or prospective tenant or the agent of the buyer or tenant as to the purchase, lease or other conveyance to the buyer or tenant of an interest in the commercial real estate.
2. The lien belongs to the real estate broker named in the brokerage agreement by the owner, buyer or tenant and not to an employee or independent contractor of the real estate broker.
Sec. 9 1. A real estate broker's lien attaches to commercial real estate, or any interest in commercial real estate, when:
(a) The real estate broker becomes entitled to a fee or commission under a written brokerage agreement; and
(b) Except as otherwise provided in section 10 or 11 of this act, the real estate broker records a notice of lien in the office of the recorder of the county in which the real estate is situated before the conveyance or transfer of the real estate against which the real estate broker claims the lien.
2. The lien attaches as of the date of the recording of the notice of lien and not on the date of the brokerage agreement.
Sec. 10 1. Except as otherwise provided in subsection 2, if payment to a real estate broker is due in installments and a portion of the payment is due only after the conveyance or transfer of commercial real estate or any interest in commercial real estate, a claim for lien for the installments due after the transfer or conveyance may be recorded at any time after the transfer or conveyance and before the date on which the payment is due, but is only effective as a lien against the real estate to the extent money is still owed to the transferor by the transferee. A single claim for lien recorded before the transfer or conveyance of commercial real estate or any interest in commercial real estate claiming all money due in installments is only valid or enforceable as it pertains to payments due after the transfer or conveyance. The lien attaches as of the recording of the notice of lien and not on the date of the brokerage agreement.
2. In the case of a lease, a claim for lien must be recorded within 90 days after the tenant takes possession of the leased premises unless written notice of the signing of the lease is personally served on the real estate broker entitled to claim the lien at least 10 days before the date of the signing of the lease. In that case, the claim for lien must be recorded before the date indicated for the signing of the lease in the notice served on the real estate broker. The lien attaches as of the recording of the notice of lien and not on the date of the brokerage agreement.
Sec. 11 If a real estate broker has a written agreement with a prospective buyer, the real estate broker's lien attaches if the buyer purchases or otherwise accepts a conveyance or transfer of the commercial real estate or any interest in the commercial real estate and the real estate broker records a notice of lien in the office of the county recorder of the county in which the real property or part of the real property is located within 90 days after the purchase or other conveyance or transfer to the buyer. The lien attaches as of the date of the recording of the notice of lien and not on the date of the brokerage agreement.
Sec. 12 1. A notice of lien recorded by a real estate broker must contain:
(a) The name of the claimant;
(b) The name of the owner of the commercial real estate upon which the lien is claimed;
(c) A legal description of the commercial real estate upon which the lien is claimed;
(d) The amount for which the lien is claimed; and
(e) The license number of the real estate broker.
2. The notice must:
(a) Recite that the information contained is true and accurate to the knowledge of the signer;
(b) Be signed by the real estate broker or by a person authorized to sign on his behalf; and
(c) Be verified.
Sec. 13 1. Except as otherwise provided in this section, a real estate broker shall, within 10 days after recording his notice of lien, mail a copy of the notice of lien to the owner of record of the commercial real estate upon which the lien is claimed by registered or certified mail, return receipt requested, or personally serve the copy on the owner of record or his agent. If the lien is recorded within 10 days before the transaction or conveyance is closed, the real estate broker is not required to mail or serve a copy of the notice of lien.
2. Mailing of the copy of the notice of lien is effective:
(a) If the notice is mailed to the address of the commercial real estate upon which the lien is claimed.
(b) When deposited in the United States mail with postage prepaid.
3. The lien is unenforceable if mailing or service of the copy of the notice of lien does not occur at the time and in the manner required by this section.
Sec. 14 1. A real estate broker claiming a lien shall, unless the claim is based upon an option to purchase the commercial real estate or a brokerage agreement that provides for the payment of the commission other than at the close of escrow, commence an action to enforce the lien within 2 years after recording the lien. If the claim is based on an option or brokerage agreement that provides for the payment of the commission other than at the close of escrow, the action to enforce the lien must be commenced within 2 years after the final payment of the commission is due. A real estate broker claiming a lien based upon an option to purchase shall commence an action within 6 months after the transfer or conveyance of the commercial real estate by virtue of the exercise of the option to purchase.
2. Failure to commence an action within the time allowed extinguishes the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceeding.
Sec. 15 1. If a claim for lien has been recorded by a real estate broker and a condition occurs that would preclude the real estate broker from receiving compensation under the terms of the brokerage agreement, the real estate broker shall provide to the owner of record of the commercial real estate upon which the lien is claimed, within 10 days after receipt of a written demand from him, a written release or satisfaction of the lien.
2. If a claim for lien has been recorded and is paid, or if there is a failure to commence an action to enforce the lien within the time required by section 14 of this act, the real estate broker shall acknowledge satisfaction or release of the lien, in writing, within 5 days after payment or expiration of the time in which to record the lien on written demand by the owner of record.
Sec. 16 In an action to enforce a real estate broker's lien:
1. The complaint must be verified;
2. A copy of the notice of lien must be attached to the complaint;
3. The summons must contain a legal description of the commercial real estate upon which the lien is claimed; and
4. All persons having an interest in the title to the real estate must be made defendants.
Sec. 17 1. A complaint to enforce a real estate broker's lien must contain:
(a) A brief statement of the contract or brokerage agreement on which the lien is founded;
(b) The date on which the contract or agreement was made;
(c) A description of the services performed;
(d) The amount due and unpaid;
(e) A legal description of the commercial real estate upon which the lien is claimed; and
(f) Such other facts as are necessary for a full understanding of the rights of the parties.
2. Failure of the plaintiff to provide proper information for summons or publication of notice is grounds for judgment against the plaintiff with prejudice.
3. A real estate broker's lien must be foreclosed in the same manner as a real estate mortgage.
Sec. 18 The cost of proceedings asserting or defending against a real estate broker's claim of lien, including reasonable attorney's fees, costs and prejudgment interest due the prevailing party, must be borne by the nonprevailing party. If more than one party is responsible for costs, fees and prejudgment interest, the costs, fees and prejudgment interest must be equitably apportioned by the court among the responsible parties.
Sec. 19 Previously recorded liens and mortgages have priority over a real estate broker's lien. A previously recorded lien may be:
1. A valid claim of mechanic's lien that is recorded after the real estate broker's notice of lien but relates back to a date before the recording date of the real estate broker's notice of lien; or
2. A previously recorded lien securing revolving credit or future advances of construction loans.
Sec. 20 1. Except as otherwise provided in subsection 2, if a claim for a real estate broker's lien is recorded that would prevent the closing of a transaction or conveyance, an escrow account must be established from the proceeds of the transaction or conveyance in an amount sufficient to release the claim for lien and the money must remain in the escrow account until the parties' rights are determined, but in no event longer than 2 years after the date the lien was recorded. The requirement to establish an escrow account is not cause for any party to refuse to close the transaction. The parties' rights to the money in escrow may be determined by written agreement of the parties, a court of competent jurisdiction or other process as may be agreed by the parties. When money in the amount of the claimed lien is placed in escrow, a release of the claim of lien must be provided by the real estate broker claiming the lien.
2. The parties need not establish an escrow if:
(a) Alternative procedures that would allow the transaction to close are available and are accepted by the transferee in the transaction; or
(b) The proceeds from the transaction are insufficient to release all liens claimed against the commercial real estate, including the real estate broker's lien.