A bill in the Colorado Legislature that allows commercial real estate brokers to file liens against properties in order to recover commissions owed by the owners moved to full House consideration Tuesday. The Commercial Real Estate Brokers Commission Security Act — House Bill 1288 — is more commonly known as the “broker lien law,” since its introduction into the Colorado House on Feb. 5. Consideration in the House Judiciary Committee is complete, following a Monday hearing on the bill and a 10-1 vote in favor of referring it to the full house. The move is part of broader regulation in the state, as Colorado regulators are also looking at new rulesthat would mandate more transparency in the way mortgage originators and servicers do business in the state. Eric Nesbitt, broker-owner of The Nesbitt Group brokerage firm in suburban Denver, a real estate attorney and board member of the Denver Metropolitan Commercial Association of Realtors (DMCAR), told the Denver Business Journal the bill gives a “hammer” to small brokerage firms that would otherwise not have the resources to hire lawyers to recover lost commissions, a position he’s been in himself. “I put a very prominent tenant in [The Landmark retail project], and the developer didn’t pay me for a year,” Nesbitt said. “I had to file a lawsuit, and I still didn’t get my full commission.” The bill’s proponents believe real estate brokers should have the same rights to file liens as other professionals like architects, building contractors and auto mechanics, according to the DBJ report. According to the text of the bill (download here), real estate brokers will be required to seek mediation prior to filing a lien, and give notice of the intent to pursue a lien both before and after filing it. In addition, if the debt is not paid in six months, the broker would be required to file a lawsuit. Liens are a legal device to ensure payment for services related to a property. If a property is sold and there are existing liens, the liens must be paid off before the new owner can have clear title of the property. Write to Austin Kilgore.
Colorado House to Consider Commerical Real Estate Broker Lien Law
March 3, 2010, 11:40am
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