Real Estate Brokers Can Now Protect Their Commissions in Commercial Real Estate Transactions


Ed Guedes, the Chair of the WSH Appellate Practice Group, reviews the recent appellate case on the ability of real estate brokers to protect their commercial real estate commissions:

The Third District Court of Appeal of Florida very recently expanded the rights real estate brokers have to protect their commissions in commercial real estate transactions.  In J. Milton Dadeland, LLC v. Abala, Inc., decided on July 30, 2014, the appellate court concluded that a broker is permitted to lien the property in a commercial real estate transaction, during the pendency of the transaction, to protect its commission in connection with the sale of the property.  For years, the prevailing view of the law was that brokers were permitted to lien the proceeds from the sale of the property, but not the property, itself.  The difference in remedy is significant since a lien on the property would require the transacting parties to ensure that the broker got paid and released the lien before the sale could close.  In contrast, merely placing a lien on the proceeds would allow the buyer and seller to consummate the transaction, and would leave the broker with the right to pursue the seller to recover the commission from the transaction proceeds.

In reaching this conclusion, the Third District construed the Florida Commercial Real Estate Sales Commission Lien Act and concluded that the remedy set forth therein – the ability to lien the proceeds – was not exclusive in nature.  The key to being able to exercise this important lien right is to ensure that the contract between the broker and seller explicitly provides for the remedy.  Otherwise, the right is unenforceable.

Guedes' broad appellate practice encompasses significant representations in fields as diverse as medical malpractice defense, premises liability defense, intellectual property, land use and zoning law, election law, constitutional law, civil rights law, and employment and labor defense. 

Categories: Appellate Law & Practice
Tags: Edward G. Guedes