Colorado's New Commercial Real Estate Brokers Commission Security Act

The newly enacted Commercial Real Estate Brokers Commission Security Act, H.B. 10-1288, creates a statutory lien in favor of Colorado real estate brokers for commissions earned in connection with leasing of commercial real estate. The lien, however, does not attached until the broker procures a tenant for the property or otherwise earns the commission, a notice of intent to record a notice of lien is served upon the owner of the property, the broker makes a good faith attempt to obtain a settlement through mediation, and the broker records a notice of lien between thirty days after the notice of intent was served and ninety days after the tenant takes possession of the leased property or after the compensation is due, whichever is later. C.R.S. sec. 38-22.5-106.

At least thirty days before recording a notice of lien with the clerk and recorder of the county in which the property is located, the commercial real estate broker must serve a notice of intent to record a notice of lien upon the owner of the property by personal service or certified mail, return receipt requested. C.R.S. sec. 38-22.5-104(1). Also, after recording the notice of lien, the broker must provide the owner with a copy of the notice of lien by personal service or certified mail, return receipt requested, otherwise the lien is valid for only ten days after it is recorded. C.R.S. sec. 38-22.5-107(1). An action to foreclose the lien must be commenced within six months after recording of the notice of lien. C.R.S. sec. 38-22.5-107(2).

The Colorado Commercial Real Estate Brokers Commission Security Act takes effect on August 11, 2010, unless a referendum against the act is timely filed.

Post By: Brent W. Houston, Esq.