As Introduced 1
122nd General Assembly 4
Regular Session H. B. No. 158 5
1997-1998 6
REPRESENTATIVES SCHULER-CORBIN-TAYLOR-KASPUTIS-OPFER-BATCHELDER- 8
OLMAN-O'BRIEN-MOTTLEY-BOYD-TERWILLEGER-JACOBSON-FORD 9
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A B I L L
To amend section 317.08 and to enact sections 13
1311.85 to 1311.93 of the Revised Code to create 15
lien rights for real estate brokers on certain 16
commercial property, to provide for the 17
perfection, enforcement, release or 18
satisfaction, and extinguishment of liens, to 19
establish lien priority, and to permit the 22
awarding of attorney's fees and costs to 23
prevailing parties. 24
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 26
Section 1. That section 317.08 be amended and sections 28
1311.85, 1311.86, 1311.87, 1311.88, 1311.89, 1311.90, 1311.91, 29
1311.92, and 1311.93 of the Revised Code be enacted to read as 31
follows:
Sec. 317.08. Except as provided in division (F) of this 40
section, the county recorder shall keep six separate sets of 42
records as follows:
(A) A record of deeds, in which shall be recorded all 44
deeds and other instruments of writing for the absolute and 45
unconditional sale or conveyance of lands, tenements, and 46
hereditaments; all notices as provided for in sections 5301.47 to 47
5301.56 of the Revised Code; all judgments or decrees in actions 48
brought under section 5303.01 of the Revised Code; all 49
declarations and bylaws as provided for in Chapter 5311. of the 50
Revised Code; affidavits as provided for in section 5301.252 of 51
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the Revised Code; all certificates as provided for in section 52
5311.17 of the Revised Code; all articles dedicating 53
archaeological preserves accepted by the director of the Ohio 54
historical society under section 149.52 of the Revised Code; all 55
articles dedicating nature preserves accepted by the director of 56
natural resources under section 1517.05 of the Revised Code; all 57
agreements for the registration of lands as archaeological or 58
historic landmarks under section 149.51 or 149.55 of the Revised 59
Code; all conveyances of conservation easements under section 60
5301.68 of the Revised Code; all instruments or orders described 61
in division (B)(1)(c)(ii) of section 5301.56 of the Revised Code; 62
all no further action letters issued under section 3746.11 of the 63
Revised Code; all covenants not to sue issued under section 64
3746.12 of the Revised Code; any restrictions on the use of 65
property identified pursuant to division (C)(3) of section 66
3746.10 of the Revised Code; and all memoranda of trust, as 67
described in division (A) of section 5301.255 of the Revised 68
Code, that describe specific real property; 69
(B) A record of mortgages, in which shall be recorded all 71
of the following: 72
(1) All mortgages, including amendments, supplements, 74
modifications, and extensions of mortgages, or other instruments 75
of writing by which lands, tenements, or hereditaments are or may 76
be mortgaged or otherwise conditionally sold, conveyed, affected, 77
or encumbered; 78
(2) All executory installment contracts for the sale of 80
land executed after September 29, 1961, that by their terms are 81
not required to be fully performed by one or more of the parties 82
to them within one year of the date of the contracts; 83
(3) All options to purchase real estate, including 85
supplements, modifications, and amendments of the options, but no 86
option of that nature shall be recorded if it does not state a 87
specific day and year of expiration of its validity. 88
(C) A record of powers of attorney, including all 90
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memoranda of trust, as described in division (A) of section 91
5301.255 of the Revised Code, that do not describe specific real 92
property; 93
(D) A record of plats, in which shall be recorded all 95
plats and maps of town lots, of the subdivision of town lots, and 96
of other divisions or surveys of lands, any center line survey of 97
a highway located within the county, the plat of which shall be 98
furnished by the director of transportation or county engineer, 99
and all drawings as provided for in Chapter 5311. of the Revised 100
Code; 101
(E) A record of leases, in which shall be recorded all 103
leases, memoranda of leases, and supplements, modifications, and 104
amendments of leases and memoranda of leases; 105
(F) A record of declarations executed pursuant to section 108
2133.02 of the Revised Code and durable powers of attorney for 110
health care executed pursuant to section 1337.12 of the Revised 111
Code. 112
All instruments or memoranda of instruments entitled to 114
record shall be recorded in the proper record in the order in 115
which they are presented for record. The recorder may index, 116
keep, and record in one volume unemployment compensation liens, 117
internal revenue tax liens and other liens in favor of the United 118
States as described in division (A) of section 317.09 of the 119
Revised Code, personal tax liens, mechanic's liens, agricultural 120
product liens, notices of liens, certificates of satisfaction or 121
partial release of estate tax liens, discharges of recognizances, 122
excise and franchise tax liens on corporations, BROKER'S LIENS, 123
and liens provided for in sections 1513.33, 1513.37, 3752.13, 125
5111.021, and 5311.18 of the Revised Code. 127
The recording of an option to purchase real estate, 129
including any supplement, modification, and amendment of the 130
option, under this section shall serve as notice to any purchaser 131
of an interest in the real estate covered by the option only 132
during the period of the validity of the option as stated in the 133
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option. 134
(G) In lieu of keeping the six separate sets of records 137
required in divisions (A) to (F) of this section and the records 139
required in division (H) of this section, a county recorder may 140
record all the instruments required to be recorded by this 141
section in two separate sets of record books. One set shall be 142
called the "official records" and shall contain the instruments 143
listed in divisions (A), (B), (C), (E), (F), and (H) of this 145
section. The second set of records shall contain the instruments 146
listed in division (D) of this section. 147
(H) Except as provided in division (G) of this section, 150
the county recorder shall keep a separate set of records
containing all corrupt activity lien notices filed with the 151
recorder pursuant to section 2923.36 of the Revised Code and a 152
separate set of records containing all medicaid fraud lien 153
notices filed with the recorder pursuant to section 2933.75 of 154
the Revised Code. 155
Sec. 1311.85. AS USED IN SECTIONS 1311.85 TO 1311.93 OF 157
THE REVISED CODE:
(A) "BROKER" MEANS AN INDIVIDUAL, PARTNERSHIP, 159
CORPORATION, OR ASSOCIATION LICENSED AS A REAL ESTATE BROKER 160
PURSUANT TO CHAPTER 4735. OF THE REVISED CODE. 161
(B) "COMMERCIAL REAL ESTATE" MEANS ANY PARCEL OF REAL 163
ESTATE IN THIS STATE OTHER THAN REAL ESTATE CONTAINING ONE TO 165
FOUR RESIDENTIAL UNITS. "COMMERCIAL REAL ESTATE" DOES NOT 166
INCLUDE SINGLE-FAMILY RESIDENTIAL UNITS SUCH AS CONDOMINIUMS, 167
TOWNHOUSES, MANUFACTURED HOUSING, OR HOMES IN A SUBDIVISION WHEN 168
SOLD, LEASED, OR OTHERWISE CONVEYED ON A UNIT-BY-UNIT BASIS, EVEN 169
THOUGH THESE UNITS MAY BE A PART OF A LARGER BUILDING OR PARCEL 170
OF REAL ESTATE CONTAINING MORE THAN FOUR RESIDENTIAL UNITS. 171
(C) "LIEN PROPERTY" MEANS ANY INTEREST IN COMMERCIAL REAL 173
ESTATE AGAINST WHICH A BROKER HAS A LIEN PURSUANT TO SECTIONS 175
1311.85 TO 1311.93 OF THE REVISED CODE.
(D) "OWNER" MEANS A PERSON WHO HAS A LEGAL OR EQUITABLE 177
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INTEREST IN LIEN PROPERTY AND WHO ENTERS INTO A WRITTEN CONTRACT 179
WITH A BROKER FOR SERVICES RELATED TO SELLING, LEASING, OR 180
CONVEYING ANY INTEREST IN THE LIEN PROPERTY.
Sec. 1311.86. (A) ANY BROKER THAT ENTERS INTO A WRITTEN 182
CONTRACT FOR SERVICES RELATED TO SELLING, LEASING, OR CONVEYING 183
ANY INTEREST IN COMMERCIAL REAL ESTATE HAS A LIEN ON THAT 184
COMMERCIAL REAL ESTATE. THE LIEN IS EFFECTIVE ONLY IF THE 185
CONTRACT FOR SERVICES IS IN WRITING AND IS SIGNED BY THE BROKER 186
OR THE BROKER'S AGENT AND THE OWNER OF THE LIEN PROPERTY OR THE 187
OWNER'S AGENT.
(B)(1) ONLY THE BROKER NAMED IN THE CONTRACT HAS A LIEN 189
PURSUANT TO THIS SECTION AND A LIEN IS NOT AVAILABLE TO ANY 190
EMPLOYEE OR INDEPENDENT CONTRACTOR OF THE BROKER. 191
(2) THE AMOUNT OF THE LIEN IS LIMITED TO THE AMOUNT DUE TO 193
THE BROKER PURSUANT TO THE CONTRACT. IF THE AMOUNT DUE TO THE 194
BROKER IS PAYABLE IN INSTALLMENTS, A PORTION OF WHICH IS DUE 195
AFTER CONVEYANCE, THE AMOUNT OF THE LIEN IS LIMITED TO THE AMOUNT 196
DUE TO THE BROKER PRIOR TO OR UPON CONVEYANCE. 197
(3) THE LIEN IS EFFECTIVE ONLY AGAINST THE INTEREST IN 199
REAL ESTATE THAT IS THE SUBJECT OF THE CONTRACT. 200
Sec. 1311.87. (A)(1) A LIEN ESTABLISHED PURSUANT TO 202
SECTION 1311.86 OF THE REVISED CODE IS PERFECTED WHEN BOTH OF THE 205
FOLLOWING HAVE OCCURRED:
(a) THE BROKER IS ENTITLED TO A FEE OR COMMISSION UNDER 207
THE CONTRACT. 208
(b) THE BROKER HAS MET THE REQUIREMENTS OF DIVISION (B) OF 211
THIS SECTION.
(2) THE LIEN IS PERFECTED AS OF THE DATE THE REQUIREMENTS 213
OF DIVISION (A)(1) OF THIS SECTION ARE MET AND DOES NOT RELATE 214
BACK TO AN EARLIER DATE. 215
(B) TO PERFECT A LIEN PURSUANT TO DIVISION (A)(1) OF THIS 218
SECTION, A BROKER SHALL COMPLY WITH ALL OF THE FOLLOWING: 220
(1) THE BROKER SHALL RECORD A LIEN AFFIDAVIT IN THE COUNTY 222
RECORDER'S OFFICE OF THE COUNTY IN WHICH THE REAL ESTATE IS 223
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LOCATED.
(2)(a) THE LIEN AFFIDAVIT SHALL INCLUDE THE NAME OF THE 225
BROKER WHO HAS THE LIEN, THE NAME OF THE OWNER OF THE LIEN 227
PROPERTY, A LEGAL DESCRIPTION OF THE LIEN PROPERTY, THE AMOUNT 228
FOR WHICH THE LIEN IS CLAIMED, THE DATE AND A SUMMARY OF THE 229
WRITTEN CONTRACT ON WHICH THE LIEN IS BASED, AND THE REAL ESTATE 230
LICENSE NUMBER OF THE BROKER. THE LIEN AFFIDAVIT SHALL STATE 231
THAT THE INFORMATION CONTAINED IN THE AFFIDAVIT IS TRUE AND 232
ACCURATE TO THE KNOWLEDGE OF THE SIGNATOR, BE SIGNED BY THE 233
BROKER OR THE BROKER'S AGENT, AND BE VERIFIED.
(b) FOR PURPOSES OF DIVISION (B)(2)(a) OF THIS SECTION, A 236
DESCRIPTION THAT IS SUFFICIENT TO DESCRIBE THE LIEN PROPERTY FOR 237
THE PURPOSE OF CONVEYANCE, OR IS CONTAINED IN THE INSTRUMENT BY 238
WHICH THE OWNER TOOK TITLE, IS A LEGAL DESCRIPTION. 240
(3) A LIEN AFFIDAVIT BASED ON THE CONVEYANCE OF LIEN 242
PROPERTY SHALL BE RECORDED PRIOR TO THE CONVEYANCE OF THE 244
PROPERTY.
(4)(a) A LIEN AFFIDAVIT BASED ON A LEASE OF LIEN PROPERTY 246
SHALL BE RECORDED WITHIN THIRTY DAYS AFTER THE FIRST RENTAL 249
PAYMENT IS DUE UNLESS THE OWNER OF THE LIEN PROPERTY HAS PROVIDED 250
NOTICE PURSUANT TO DIVISION (B)(4)(b) OF THIS SECTION. 251
(b) IF THE OWNER HAS PROVIDED THE BROKER WITH WRITTEN 253
NOTICE OF THE INTENDED DATE FOR SIGNING THE LEASE, WHICH IS 255
SERVED ON THE BROKER NO LATER THAN TEN DAYS PRIOR TO THE INTENDED 256
DATE OF SIGNING THE LEASE EITHER BY PERSONAL DELIVERY OR BY 259
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, THE BROKER SHALL RECORD
THE LIEN AFFIDAVIT BEFORE THAT DATE. 260
(5) ON THE DAY THE LIEN AFFIDAVIT IS RECORDED, THE BROKER 262
SHALL PROVIDE A COPY OF THE LIEN AFFIDAVIT TO THE OWNER OF THE 263
LIEN PROPERTY AND, WHERE A CONTRACT FOR THE SALE OR OTHER 266
CONVEYANCE OF THE LIEN PROPERTY HAS BEEN ENTERED INTO, TO THE
PROSPECTIVE TRANSFEREE, WHERE KNOWN, EITHER BY PERSONAL DELIVERY 268
OR BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
Sec. 1311.88. (A) TO COMMENCE PROCEEDINGS TO ENFORCE A 270
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LIEN, A BROKER SHALL COMPLY WITH ALL OF THE FOLLOWING: 271
(1) THE BROKER SHALL FILE A COMPLAINT IN THE COMMON PLEAS 274
COURT IN THE COUNTY WHERE THE LIEN PROPERTY IS LOCATED. 275
(2)(a) THE COMPLAINT SHALL BE FILED WITHIN ONE YEAR 277
FOLLOWING THE RECORDING OF THE LIEN AFFIDAVIT AS PROVIDED IN 278
DIVISION (B) OF SECTION 1311.87 OF THE REVISED CODE. 279
(b) FAILURE TO FILE A COMPLAINT WITHIN THE TIME SPECIFIED 281
IN THIS DIVISION EXTINGUISHES THE LIEN, IN WHICH CASE NO 282
SUBSEQUENT LIEN AFFIDAVIT MAY BE RECORDED FOR THE SAME CLAIM AND 284
THE CLAIM MAY NOT BE ASSERTED IN ANY PROCEEDING UNDER THIS 285
SECTION.
(3) A COMPLAINT SHALL IDENTIFY THE CONTRACT UPON WHICH THE 287
LIEN IS BASED AND THE DATE OF THE CONTRACT, DESCRIBE THE SERVICES 288
PERFORMED BY THE BROKER PURSUANT TO THE CONTRACT, SPECIFY THE 289
UNPAID AMOUNTS DUE TO THE BROKER PURSUANT TO THE CONTRACT, 290
SPECIFY THE ADDRESS OF THE LIEN PROPERTY, AND HAVE A COPY OF THE 293
CONTRACT ATTACHED.
(4) THE BROKER SHALL NAME AS DEFENDANTS IN THE COMPLAINT 295
ALL PARTIES THAT HAVE A LEGAL OR EQUITABLE INTEREST IN THE LIEN 296
PROPERTY RECORDED IN THE RECORDER'S OFFICE IN THE COUNTY IN WHICH 298
THE LIEN PROPERTY IS LOCATED OR OF WHOM THE BROKER HAS KNOWLEDGE. 299
(B)(1) THE OWNER MAY DEMAND THAT THE BROKER COMMENCE A 302
SUIT TO ENFORCE A BROKER'S LIEN OR FILE AN ANSWER IN A PENDING
SUIT INVOLVING A CLAIM BASED UPON A BROKER'S LIEN BY SERVING A 304
WRITTEN NOTICE OF DEMAND ON THE BROKER BY PERSONAL DELIVERY OR BY 307
CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
(2) IF THE BROKER DOES NOT COMMENCE THE SUIT OR FILE THE 309
ANSWER DEMANDED WITHIN TWENTY-EIGHT DAYS AFTER RECEIPT OF THE 310
NOTICE OF DEMAND, THE LIEN IS EXTINGUISHED. 311
(C) IN AN ACTION BASED ON A BROKER'S LIEN, A COURT MAY 313
ASSESS THE NONPREVAILING PARTIES WITH COSTS AND REASONABLE 315
ATTORNEY'S FEES INCURRED BY THE PREVAILING PARTIES. THE COURT 316
SHALL EQUITABLY APPORTION THE ASSESSED COSTS AND ATTORNEY'S FEES 317
AMONG ALL RESPONSIBLE NONPREVAILING PARTIES. 318
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Sec. 1311.89. (A) ALL LIENS CLAIMED UNDER SECTIONS 320
1311.85 TO 1311.93 OF THE REVISED CODE SHALL BE SUBJECT TO 322
SECTION 2323.07 OF THE REVISED CODE UNLESS THE PARTIES AGREE TO 323
PROCEED PURSUANT TO DIVISION (B) OF THIS SECTION. 324
(B) IF THE BROKER AND OWNER AGREE TO ALTERNATIVE DISPUTE 326
RESOLUTION (ADR), THE CLAIM SHALL BE HEARD AND RESOLVED IN THE 327
AGREED UPON ADR FORUM. THE COURT SHALL RETAIN JURISDICTION TO 328
ENTER AND ENFORCE THE AWARD OR OTHER RESULT OF ADR ON ALL 329
INTERESTED PARTIES TO THE FORECLOSURE. 330
Sec. 1311.90. (A) A BROKER SHALL RECORD A WRITTEN RELEASE 332
OR SATISFACTION OF THE BROKER'S LIEN IN THE COUNTY RECORDER'S 333
OFFICE OF THE COUNTY IN WHICH THE LIEN WAS RECORDED WITHIN TEN 335
DAYS AFTER ANY OF THE FOLLOWING:
(1) MONEYS IN AN AMOUNT SUFFICIENT TO RELEASE THE BROKER'S 337
LIEN ESTABLISHED PURSUANT TO SECTION 1311.86 OF THE REVISED CODE 338
HAVE BEEN DEPOSITED IN AN ESCROW ACCOUNT ESTABLISHED PURSUANT TO 339
SECTION 1311.92 OF THE REVISED CODE.
(2) THE OWNER SATISFIES THE CLAIM UPON WHICH THE BROKER'S 341
LIEN IS BASED.
(3) THE BROKER FAILS TO FILE A CLAIM TO ENFORCE A LIEN 343
WITHIN THE TIME SPECIFIED IN SECTION 1311.88 OF THE REVISED CODE. 345
(4) THE CLAIM UPON WHICH THE BROKER'S LIEN IS BASED HAS 347
BEEN RESOLVED BY A WRITTEN AGREEMENT OF THE BROKER AND OWNER, BY 349
A COURT, OR BY ANY PROCESS AGREED TO BY THE BROKER AND OWNER. 350
(B) ON THE DAY THE RELEASE OR SATISFACTION IS RECORDED, 352
THE BROKER SHALL PROVIDE THE OWNER WITH A COPY OF THE RELEASE OR 354
SATISFACTION BY PERSONAL DELIVERY OR BY CERTIFIED MAIL, RETURN 356
RECEIPT REQUESTED.
Sec. 1311.91. PRIOR RECORDED LIENS AND MORTGAGES HAVE 358
PRIORITY OVER A BROKER'S LIEN PERFECTED PURSUANT TO SECTION 359
1311.87 OF THE REVISED CODE. A PRIOR RECORDED LIEN INCLUDES A 361
VALID MECHANIC'S LIEN CLAIM THAT IS RECORDED SUBSEQUENT TO THE 362
BROKER'S LIEN AFFIDAVIT BUT RELATES BACK TO A DATE PRIOR TO THE 363
RECORDING DATE OF THE BROKER'S NOTICE OF LIEN AFFIDAVIT. 364
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Sec. 1311.92. (A) EXCEPT AS PROVIDED IN DIVISION (D) OF 366
THIS SECTION, TO ENABLE A TRANSFER OF LIEN PROPERTY TO CLOSE WHEN 367
A BROKER'S PERFECTED LIEN MAY OTHERWISE PREVENT THE CLOSING, A 369
SEPARATE ESCROW ACCOUNT SHALL BE ESTABLISHED BY THE OWNER INTO 370
WHICH MONEYS FROM THE PROCEEDS OF THE CLOSING SHALL BE DEPOSITED 372
IN AN AMOUNT SUFFICIENT TO RELEASE THE BROKER'S LIEN. THE MONEYS 373
SHALL BE HELD IN ESCROW AND SHALL ONLY BE RELEASED AS ORDERED BY 374
A COURT OF COMPETENT JURISDICTION, OR AS DIRECTED BY AGREEMENT OF 375
THE BROKER AND OWNER OR BY ANY PROCESS AGREED TO BY THE BROKER 377
AND OWNER.
(B) AN OWNER MAY NOT REFUSE TO CLOSE A TRANSFER OF LIEN 379
PROPERTY BECAUSE OF THE REQUIREMENT TO ESTABLISH AN ESCROW 381
ACCOUNT UNDER DIVISION (A) OF THIS SECTION. A PROSPECTIVE 382
TRANSFEREE OF LIEN PROPERTY SHALL NOT REFUSE TO CLOSE THE 383
TRANSFER OF THE LIEN PROPERTY SOLELY BECAUSE THE BROKER RECORDED 384
A LIEN AFFIDAVIT UNDER THIS SECTION, IF ALL OF THE FOLLOWING HAVE 385
OCCURRED:
(1) THE OWNER HAS ESTABLISHED THE ESCROW ACCOUNT REQUIRED 387
BY DIVISION (A) OF THIS SECTION; 388
(2) THE PROSPECTIVE TRANSFEREE HAS RECEIVED FROM THE 390
ESCROW AGENT FOR THE ESCROW ACCOUNT REQUIRED BY DIVISION (A) OF 391
THIS SECTION A VERIFIED STATEMENT THAT THE ESCROW ACCOUNT HAS 392
BEEN ESTABLISHED.
(C) WHEN FUNDS HAVE BEEN PLACED IN ESCROW PURSUANT TO 394
DIVISION (A) OF THIS SECTION, THE BROKER CLAIMING A BROKER'S LIEN 395
UNDER THIS SECTION HAS AN EQUITABLE LIEN ON THE ESCROWED FUNDS, 398
AND THE LIEN RECORDED ON THE LIEN PROPERTY SHALL BE EXTINGUISHED 399
AS A MATTER OF LAW.
(D) THE BROKER AND OWNER ARE NOT REQUIRED TO FOLLOW THE 401
ESCROW PROCEDURES DESCRIBED IN THIS SECTION IF EITHER OF THE 402
FOLLOWING APPLIES: 403
(1) AN ALTERNATIVE PROCEDURE IS AVAILABLE THAT WOULD ALLOW 405
THE TRANSFER OF LIEN PROPERTY TO CLOSE AND THAT PROCEDURE IS 406
ACCEPTABLE TO THE BROKER AND PROSPECTIVE TRANSFEREE. 407
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(2) THE PROCEEDS FROM THE TRANSFER OF LIEN PROPERTY WOULD 409
BE INSUFFICIENT TO RELEASE ALL LIENS, INCLUDING THE BROKER'S 411
LIEN, THAT ARE CLAIMED AGAINST THE LIEN PROPERTY. 412
Sec. 1311.93. ANY BROKER THAT ASSERTS OR RECORDS A 414
SPURIOUS OR MATERIALLY INACCURATE BROKER'S LIEN UNDER THIS 415
SECTION OR FAILS TO RELEASE OR ACKNOWLEDGE RELEASE OR 416
SATISFACTION OF A BROKER'S LIEN IN COMPLIANCE WITH THIS SECTION, 417
IS LIABLE FOR DAMAGES INCURRED BY ANY PERSON WHO HAS A LEGAL OR 418
EQUITABLE INTEREST IN THE LIEN PROPERTY. 420
Section 2. That existing section 317.08 of the Revised 422
Code is hereby repealed. 423