71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1684
Senate Bill 972
Sponsored by Senator HARTUNG
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Allows real estate brokers to claim lien upon commercial real
estate that is subject of sale, lease or other conveyance.
A BILL FOR AN ACT
Relating to commercial real estate.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1, 2 and 4 of this 2001
Act:
(1) 'Commercial real estate' means real estate located in
Oregon except:
(a) Real estate on which no buildings or structures are located
and that is zoned for single-family residential use;
(b) Real estate containing one to four residential units; or
(c) Single-family residential units such as condominiums, town
houses or homes in a subdivision when sold, leased or otherwise
conveyed on a unit by unit basis.
(2) 'Real estate' has the meaning given in ORS 696.010.
(3) 'Real estate broker' means a person licensed under ORS
696.025 (1).
(4) 'County clerk' means the county clerk of the county or
counties in which the commercial real estate or real property, as
applicable, is located. + }
SECTION 2. { + (1) If commercial real estate or an interest in
commercial real estate is the subject of a sale, lease or other
conveyance to a buyer or lessee, a real estate broker shall have
a lien upon that commercial real estate in the amount that the
real estate broker is due:
(a) Under a written instrument signed by the seller or lessor
of the commercial real estate, or the authorized agent of the
seller or lessor; or
(b) Under a written instrument signed by a prospective buyer or
lessee of the commercial real estate, or the authorized agent of
the buyer or lessee.
(2) The lien shall be available to the real estate broker named
in the instrument signed by the owner, buyer, lessee or
authorized agent, and not to an employee or independent
contractor of the real estate broker.
(3) Liens governed by sections 1 to 4 of this 2001 Act shall
attach on the recording date of the notice of lien and do not
relate back to the date of the written instrument. The lien shall
attach to the commercial real estate or an interest in the
commercial real estate when:
(a) A real estate broker becomes entitled to a fee or
commission under a written instrument signed by the owner, buyer,
lessee or authorized agent; and
(b) Except as provided in subsection (4), (5), (6) or (7) of
this section, a real estate broker records a notice of lien with
the county clerk prior to the actual conveyance or transfer of
the commercial real estate against which the real estate broker
is claiming a lien.
(4)(a) Except as provided in subsection (5), (6) or (7) of this
section, when payment to a real estate broker is due in
installments, at least one of which is due only after the
conveyance or transfer of the commercial real estate, a notice of
lien for those installment payments due after the conveyance or
transfer may be recorded after the conveyance or transfer of the
commercial real estate and before the due date of the first
installment payment due after the conveyance or transfer. The
notice of lien shall be effective as a lien against the
transferor's interest in the commercial real estate only to the
extent money is still owed to the transferor by the transferee.
(b) A single claim of lien recorded prior to conveyance or
transfer of the commercial real estate claiming all moneys due
under an installment payment agreement shall be enforceable as to
installment payments due after the conveyance or transfer.
However, a real estate broker shall provide partial release for
each installment payment received and reduce the amount due under
the lien to the real estate broker correspondingly.
(5)(a) In the case of a lease, sublease or assignment of lease,
the notice of lien must be recorded within 90 days after the
lessee takes possession of the leased premises.
(b) Notwithstanding subsection (5)(a) of this section, if the
transferor personally serves written notice of the intended
execution of the lease upon the real estate broker at least 10
days prior to the date of the intended execution of the lease,
the notice of lien must be recorded before the date indicated for
the execution of the lease in the written notice.
(6)(a) If, pursuant to a written instrument signed by the owner
or lessee that owns or leases the property prior to the
conveyance or transfer, or the owner's or lessee's authorized
agent, a real estate broker may be due any additional commission
as a result of future events or occurrences, including the
exercise of an option to expand the leased premises, purchase the
commercial real estate or renew or extend a lease, the real
estate broker may record the notice of lien after execution of
the lease or other written instrument that contains the options
but within 90 days after the event or occurrence on which the
additional commission is claimed.
(b) Notwithstanding subsection (10) of this section, an action
to foreclose a lien to collect additional commissions must be
commenced within two years after the event or occurrence on which
the additional commissions are claimed.
(7)(a) If the commercial real estate is subsequently sold or
otherwise conveyed prior to the date on which additional
commissions are due and if the real estate broker has filed a
valid notice of lien prior to the sale or other conveyance of the
commercial real estate, the purchaser or transferee is deemed to
have notice of, and takes title to the commercial real estate
subject to, the lien.
(b) If a real estate broker claiming additional commissions
does not record the notice of lien for the additional commissions
prior to the recording of a deed conveying legal title to the
commercial real estate to the purchaser or transferee, the real
estate broker may not claim a lien on the commercial real estate.
(c) Nothing in this subsection limits or otherwise affects
claims or defenses a real estate broker, owner or other affected
party may have on any other basis.
(8) If a real estate broker has a written instrument with a
prospective buyer or lessee as described in subsection (1)(b) of
this section, the lien shall attach when:
(a) The prospective buyer or lessee purchases or otherwise
accepts a conveyance or transfer of the commercial real estate;
and
(b) The real estate broker records a notice of lien with the
county clerk within 90 days after the purchase or other
conveyance or transfer to the buyer or lessee.
(9)(a) The real estate broker shall, within 10 days of
recording a notice of lien, personally serve a copy or mail a
copy of the notice of lien to the owner of record of the
commercial real estate, or the owner's authorized agent, by
registered or certified mail to the address stated in the written
instrument on which the claim of lien is based, or if no address
is given, to the address of the commercial real estate on which
the claim of lien is based. The copy of the notice of claim of
lien is effective upon personal service or mailing with postage
prepaid.
(b) If the notice of lien is recorded within 10 days prior to
closing, the real estate broker is not required to mail or
personally serve a copy of the notice of lien.
(c) The real estate broker's lien shall be unenforceable if the
real estate broker does not mail or serve a copy of the notice of
lien within the time and in the manner required by this
subsection.
(10)(a) Within two years after recording the notice of lien, a
real estate broker may file suit to enforce a lien in the circuit
court of the county in which the commercial real estate is
located by filing a complaint and sworn affidavit that the lien
has been recorded. If the real estate broker does not file suit
within two years after recording the notice of lien, the lien is
extinguished and a subsequent notice of lien may not be given for
the same claim and the claim may not be asserted in a proceeding
under sections 1 to 4 of this 2001 Act.
(b) A real estate broker claiming a lien based upon an option
or other right to purchase or lease shall file suit within two
years after the conveyance or transfer of the commercial real
estate. If the real estate broker does not file suit after the
conveyance or transfer, the lien is extinguished and a subsequent
notice of lien may not be given for the same claim and the claim
may not be asserted in a proceeding under sections 1 to 4 of this
2001 Act.
(c) The complaints described in paragraphs (a) and (b) of this
subsection shall include:
(A) A brief statement of the contract or instrument on which
the lien is founded;
(B) The date when the contract or instrument was made;
(C) A description of the services performed;
(D) The amounts due and unpaid;
(E) A description of the commercial real estate that is subject
to the lien; and
(F) Other facts necessary for a full understanding of the
rights of the parties.
(d) In addition to the requirements of ORS 88.030, the
plaintiff shall make all known interested parties defendants in
the action and shall issue summons and provide service of summons
as provided in ORCP 7 D. All liens claimed under sections 1 to 4
of this 2001 Act shall be foreclosed in a suit in the circuit
court under ORS chapter 88.
(11) Any notice of lien recorded pursuant to this section
shall:
(a) State the name of the claimant and owner of record;
(b) Provide a description of the commercial real estate upon
which the lien is claimed;
(c) State the amount for which the lien is claimed;
(d) Provide the real estate license number of the real estate
broker;
(e) Recite that the information contained in the notice is true
and accurate to the knowledge of the signatory; and
(f) Be signed by the real estate broker or the authorized agent
of the real estate broker.
(12) If a notice of lien has been filed with the county clerk
and a condition occurs that would preclude the real estate broker
from receiving compensation under the terms of the real estate
broker's written instrument, within 10 days after receiving a
demand by the owner of record, or the owner's authorized agent,
the real estate broker shall provide to the owner or agent a
written release or satisfaction of the lien.
(13)(a) If the broker and the party or parties from whom the
commission is claimed agree to alternative dispute resolution,
the claim shall be heard and resolved in the forum on which the
parties have agreed.
(b) The court before which the lien foreclosure proceeding is
brought shall retain jurisdiction to enter judgment on the award
or other result made or reached through alternative dispute
resolution by the parties to the foreclosure. The broker's notice
of lien shall remain of record and the foreclosure proceeding
shall be stayed during the alternative dispute resolution
process.
(14) Upon written demand of the owner of record or the owner's
authorized agent, served upon the real estate broker claiming the
lien, a suit shall be commenced or answer filed within 30 days
after receipt of the written demand or the lien shall be
extinguished. The demand may be served by registered or certified
mail, return receipt requested, or by personal service.
(15) The real estate broker shall acknowledge satisfaction or
release of the lien in writing:
(a) Within five days after payment and upon written demand of
the owner, or the owner's authorized agent, if a notice of lien
has been filed with the county clerk and the claimed commission
has been paid to the real estate broker claiming the lien; or
(b) Within five days after expiration of the time in which to
file the lien if there is failure to institute a suit to enforce
the lien within the time provided by this section.
(16) The court shall award to the prevailing party the cost of
proceedings brought under sections 1 to 4 of this 2001 Act,
including reasonable attorney fees, costs and prejudgment
interests. + }
SECTION 3. { + A prior recorded encumbrance shall have
priority over a lien created under section 2 of this 2001 Act,
including a prior recorded construction lien as described in ORS
87.001 to 87.093. + }
SECTION 4. { + Except as otherwise provided in section 2 of
this 2001 Act, if a notice of claim of lien has been filed that
would prevent the closing of a commercial real estate transaction
or conveyance, an escrow account shall be established from the
proceeds of the transaction or conveyance that is 125 percent of
the amount claimed under the lien. The requirement to establish
an escrow account is not cause for a party to refuse to close the
transaction. + }
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