770 ILCS 15/ Commercial Real Estate Broker Lien Act.

(770 ILCS 15/1) (from Ch. 82, par. 651)

Sec. 1. This Act may be cited as the Commercial Real Estate Broker Lien Act.

(Source: P.A. 87-779.)

(770 ILCS 15/5) (from Ch. 82, par. 655)

Sec. 5. Definitions. As used in this Act:

"Commercial real estate" means any real estate located in Illinois other than (i) real estate containing one to 6 residential units, (ii) real estate on which no buildings or structures are located, or (iii) real estate classified as farmland for assessment purposes under the Property Tax Code. Commercial real estate shall not include single family residential units such as condominiums, townhouses, or homes in a subdivision when sold, leased, or otherwise conveyed on a unit by unit basis even though these units may be part of a larger building or parcel of real estate containing more than 6 residential units.

"Real estate", "broker", and "employee" are defined as in the Real Estate License Act of 2000.

"Interest in commercial real estate" shall include, without limitation, any interest in a land trust as defined in Section 15-1205 of the Code of Civil Procedure.

(Source: P.A. 91-245, eff. 12-31-99.)

(770 ILCS 15/10) (from Ch. 82, par. 660)

Sec. 10. Broker's lien.

(a) Any broker shall have a lien, upon commercial real estate or any interest in that commercial real estate, in the amount that the broker is due:

(1) under a written instrument signed by the owner of an interest in the commercial real estate or the owner's duly authorized agent;

(2) (blank); or

(3) under a written instrument signed by a prospective buyer or prospective tenant or their respective duly authorized agent as to the purchase, lease, or other conveyance to the buyer or tenant of an interest in the commercial real estate.

The lien shall be available to the broker named in the instrument signed by the owner, buyer, or tenant and not to an employee or independent contractor of the broker.

(b) The lien under this Act shall attach to the commercial real estate, or any interest in the commercial real estate, upon:

(1) the broker being otherwise entitled to a fee or commission under a written instrument signed by the owner, buyer, tenant, or their respective duly authorized agent, as applicable; and

(2) except as provided in subsection (c), (d), or (e) the broker recording a notice of lien in the Recorder's Office, or the Office of the Registrar of Titles, of the county in which the commercial real estate is located prior to the actual conveyance or transfer of the commercial real estate against which the broker is claiming a lien. The lien shall attach as of the date of the recording of the notice of lien and does not relate back to the date of the written agreement.

(c) Except as provided in subsection (d), when payment to a broker is due in installments, a portion of which is due only after the conveyance or transfer of the commercial real estate, any claim for lien for those payments due after the transfer or conveyance may be recorded at any time subsequent to the transfer or conveyance of the commercial real estate and prior to the date on which the payment is due but shall only be effective as a lien against the commercial real estate to the extent monies are still owed to the transferor by the transferee. A single claim for lien recorded prior to transfer or conveyance of the commercial real estate claiming all monies due under an installment payment agreement shall not be valid or enforceable as it pertains to payments due after the transfer or conveyance. The lien shall attach as of the recording of the notice of lien and not relate back to the date of the written agreement.

(d) In the case of a lease the claim for lien must be recorded within 90 days after the tenant takes possession of the leased premises unless written notice of the intended signing of the lease is personally served on the broker entitled to claim a lien at least 10 days prior to the date of the intended signing of the lease in which case the claim for lien must be recorded before the date indicated for the signing of the lease in the notice served on the broker. The lien shall attach as of the recording of the notice of lien and not relate back to the date of the written agreement.

(e) If a broker has a written agreement with a prospective buyer or tenant as provided for in paragraph (3) of subsection (a) of this Section, then the lien shall attach upon the prospective buyer or tenant purchasing, leasing, or otherwise accepting a conveyance or transfer of the commercial real estate and the recording of a notice of lien by the broker in the Recorder's Office, or the Office of Registrar of Titles, of the county in which the real property, or any interest in the real property, is located within 90 days after the purchase, lease, or other conveyance or transfer to the buyer or tenant. The lien shall attach to the interest purchased or leased by the buyer or tenant as of the date of the recording of the notice of lien and does not relate back to the date of the written agreement.

(f) The broker shall within 10 days of recording its notice of lien mail a copy of the notice of lien to the owner of record of the commercial real estate by registered or certified mail, with return receipt requested, or personally served on the owner of record or his agent. If the lien is recorded within 10 days prior to closing, the broker is not required to mail or personally serve a copy of the notice of lien. Mailing of the copy of the notice of lien is effective if mailed to the address of the commercial real estate that is the subject of the notice of lien. Mailing of the copy of the notice of claim for lien is effective when deposited in the United States mailbox with postage prepaid. The broker's lien shall be unenforceable if mailing of the copy of the notice of lien recording does not occur at the time and in the manner required by this Act.

(g) A broker may bring suit to enforce a lien in the Circuit Court in the county where the property is located by filing a complaint and sworn affidavit that the lien has been recorded.

The person claiming a lien shall, unless the claim is based upon an option to purchase the commercial real estate, within 2 years after recording the lien, commence proceedings by filing a complaint. Failure to commence proceedings within 2 years after recording the lien shall extinguish the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings under this Act.

A person claiming a lien based upon an option to purchase shall, within 6 months after the transfer or conveyance of the commercial real estate under the exercise of the option to purchase, commence proceedings by filing a complaint. Failure to commence proceedings within this time shall extinguish the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings under this Act.

A complaint under this Section shall contain a brief statement of the contract or agreements on which the lien is founded, the date when the contract or agreement was made, a description of the services performed, the amount due and unpaid, a description of the property that is subject to the lien, and other facts necessary for a full understanding of the rights of the parties. The plaintiff shall make all interested parties, of whose interest the plaintiff is notified or has knowledge, defendants to the action, and shall issue summons and provide service as in other civil actions. When any defendant resides or has gone out of the State, or on inquiry cannot be found, or is concealed within this State so that process cannot be served on that defendant, the plaintiff shall cause a notice to be given to that defendant, or cause a copy of the complaint to be served upon that defendant, in the manner and upon the same conditions as in other civil actions. Failure of the plaintiff to provide proper summons or notice shall be grounds for judgment against the plaintiff with prejudice. All liens claimed under this Act shall be foreclosed as provided for in the Illinois Mortgage Foreclosure Law.

(h) The lien notice shall state the name of the claimant, the name of the owner, a description of the property upon which the lien is being claimed, the amount for which the lien is claimed, and the real estate license number of the broker. The notice of lien shall recite that the information contained in the notice is true and accurate to the knowledge of the signator. The notice of lien shall be signed by the broker or by a person authorized to sign on behalf of the broker and shall be verified.

(i) Whenever a claim for lien has been filed with the County Recorder or Registrar of Titles and a condition occurs that would preclude the broker from receiving compensation under the terms of the broker's written agreement, the broker shall provide to the owner of record, within 10 days following demand by the owner of record, a written release or satisfaction of the lien.

(j) Upon written demand of the owner, lienee, or other authorized agent, served on the person claiming the lien requiring suit to be commenced to enforce the lien or answer to be filed in a pending suit, a suit shall be commenced or answer filed within 30 days thereafter, or the lien shall be extinguished. Service may be by registered or certified mail, return receipt requested, or by personal service.

(k) Whenever a claim for lien has been filed with the County Recorder or Registrar of Titles and is paid, or where there is failure to institute a suit to enforce the lien within the time provided by this Act, the broker shall acknowledge satisfaction or release of the lien, in writing, on written demand of the owner within 5 days after payment or expiration of the time in which to file the lien.

(l) The cost of proceedings asserting or defending a broker's claim of lien, including reasonable attorneys' fees, costs, and prejudgment interests due to the prevailing party shall be borne by the nonprevailing party or parties. When more than one party is responsible for costs, fees, and prejudgment interests, the costs, fees, and prejudgment interests shall be equitably apportioned by the court among those responsible parties.

(Source: P.A. 90-338, eff. 8-8-97; 91-357, eff. 7-29-99.)

(770 ILCS 15/15) (from Ch. 82, par. 665)

Sec. 15. Priority. Prior recorded liens and mortgages shall have priority over a broker's lien. A prior recorded lien shall include, without limitation, (i) a valid mechanic's lien claim that is recorded subsequent to the broker's notice of lien but which relates back to a date prior to the recording date of the broker's notice of lien; and (ii) prior recorded liens securing revolving credit and future advances of construction loans as described in Section 15-1302 of the Code of Civil Procedure.

(Source: P.A. 87-779; 88-354.)

(770 ILCS 15/20) (from Ch. 82, par. 670)

Sec. 20. Escrow of disputed amounts. Except as otherwise provided in this Section, whenever a claim for lien has been filed with the County Recorder or Registrar of Titles that would prevent the closing of a transaction or conveyance, an escrow account shall be established from the proceeds from the transaction or conveyance in an amount sufficient to release the claim for lien. The requirement to establish an escrow account, as provided for in this Section, shall not be cause for any party to refuse to close the transaction. These monies shall be held in escrow until the parties' rights to the escrowed monies have been determined by written agreement of the parties, a court of law, or other process as may be agreed to by the parties. Upon funds in the amount of the claimed lien being escrowed, a release of the claim for lien shall be provided by the broker claiming the lien. The parties are not required to follow this escrow procedure if alternative procedures which would allow the transaction to close are available and are acceptable to the transferee in the transaction. If the proceeds from the transaction are insufficient to release all liens claimed against the commercial real estate, including the broker's lien, then the parties are not required to follow this escrow procedure in the Section.

(Source: P.A. 87-779.)