CHAPTER 62. BROKER'S AND APPRAISER'S LIEN ON COMMERCIAL REAL ESTATE - Texas Statutes

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.