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What You Need to Know About Florida Commercial Real Estate Lien Law
A detailed look at legal requirements for transactions that fall under the state's commercial real estate lien law.
The 2 parts of Florida's commercial lien law
- The first part deals with commercial liens on sale transactions, which attach to the owner’s net proceeds only and not any interest in real property. (Commercial Real Estate Sales Commission Lien Act, Chapter 475 Part III, Florida Statutes)
- The second part of the commercial lien law focuses on lease transactions. For the purposes of this section, an owner can be a landlord or a tenant. The Act gives a broker a lien on the owner’s interest in commercial real estate, but not the tenant’s leasehold estate, if the owner is a landlord. If the owner is a tenant, the broker’s lien attaches to the tenant’s leasehold estate, but not to the landlord’s interest in the commercial real estate. (Commercial Real Estate Leasing Commission Lien Act, Chapter 475 Part IV, Florida Statutes)
Other things to know
- The lien belongs only to the broker and not to an employee or independent contractor of the broker.
- The lien for commission arising under the law cannot be assigned and may not be enforced by a person other than the broker.
- The commercial sales lien law does not apply to an agreement between a broker and a buyer for compensation of services. However, the commercial lease lien law could apply to a tenant agreement.
- A broker must disclose to the owner at or before the time the owner executes the brokerage agreement that this law creates lien rights for a commission earned by the broker. The statute also states "a broker may not enforce a lien under this part for a commission earned under a brokerage agreement for which the disclosure required by this subsection was not made." (Section 475.703(5) & 475.803(6), Florida Statutes)