New Michigan Law: Commercial Broker Lien Act

If you are a property owner, landlord, tenant or real estate broker, this will be of interest to you.

On October 5, 2010, Governor Granholm signed the Commercial Broker Lien Act which allows licensed real estate brokers the right to file a claim of lien for a broker’s commission against property involved in a sale or lease transaction.

There are a few exceptions to the Act for single family homes, small apartment complexes, single family zoned vacant land, and others. Most commercial real estate transactions are covered by the Act. To be effective, the broker must file a lien based on a written agreement for a commission which requires a commission to be paid. A selling broker’s lien must be recorded prior to the conveyance of real estate and the buyer’s broker may record a lien after its sale. Under certain circumstances, the broker may file a lien in connection with a lease transaction within 60 days following the execution of a lease.

The bottom line is you must exercise extreme caution prior to signing any commission agreement or other agreement with a real estate broker. All such agreements should be carefully reviewed by your attorney prior to signing.