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As Reported by the Senate Insurance, Commerce
and Labor Committee
122nd General Assembly
Regular Session
1997-1998 | Sub. H. B. No. 158 |
REPRESENTATIVES SCHULER-CORBIN-TAYLOR-KASPUTIS-OPFER-BATCHELDER-
OLMAN-O'BRIEN-MOTTLEY-BOYD-TERWILLEGER-JACOBSON-FORD-
PADGETT-REID-GARCIA-HOUSEHOLDER-KRUPINSKI-THOMPSON-
METELSKY-WINKLER-TIBERI-MAIER-BRADING-CLANCY-MILLER-
PRENTISS-WILSON-DAMSCHRODER
-SENATOR ZALESKI
A BILL
To amend section 317.08 and to enact sections 1311.85 to 1311.93 of the
Revised Code to
create lien rights for real estate brokers on
certain commercial
property, to provide for the perfection, enforcement, release
or satisfaction, and extinguishment of
liens, to establish
lien priority, and
to
permit the awarding of attorney's fees and
costs to prevailing
parties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 317.08 be amended and sections 1311.85, 1311.86,
1311.87, 1311.88, 1311.89, 1311.90, 1311.91, 1311.92, and 1311.93 of the
Revised
Code be enacted to read as follows:
Sec. 317.08. Except as provided in division (F) of this
section, the county recorder shall keep six separate sets
of records as follows:
(A) A record of deeds, in which shall be recorded all
deeds and other instruments of writing for the absolute and
unconditional sale or conveyance of lands, tenements, and
hereditaments; all notices as provided for in sections 5301.47 to
5301.56 of the Revised Code; all judgments or decrees in actions
brought under section 5303.01 of the Revised Code; all
declarations and bylaws as provided for in Chapter 5311. of the
Revised Code; affidavits as provided for in section 5301.252 of
the Revised Code; all certificates as provided for in section
5311.17 of the Revised Code; all articles dedicating
archaeological preserves accepted by the director of the Ohio
historical society under section 149.52 of the Revised Code; all
articles dedicating nature preserves accepted by the director of
natural resources under section 1517.05 of the Revised Code; all
agreements for the registration of lands as archaeological or
historic landmarks under section 149.51 or 149.55 of the Revised
Code; all conveyances of conservation easements under section
5301.68 of the Revised Code; all instruments or orders described
in division (B)(1)(c)(ii) of section 5301.56 of the Revised Code;
all no further action letters issued under section 3746.11 of the
Revised Code; all covenants not to sue issued under section
3746.12 of the Revised Code; any restrictions on the use of
property identified pursuant to division (C)(3) of section
3746.10 of the Revised Code; and all memoranda of trust, as
described in division (A) of section 5301.255 of the Revised
Code, that describe specific real property;
(B) A record of mortgages, in which shall be recorded all
of the following:
(1) All mortgages, including amendments, supplements,
modifications, and extensions of mortgages, or other instruments
of writing by which lands, tenements, or hereditaments are or may
be mortgaged or otherwise conditionally sold, conveyed, affected,
or encumbered;
(2) All executory installment contracts for the sale of
land executed after September 29, 1961, that by their terms are
not required to be fully performed by one or more of the parties
to them within one year of the date of the contracts;
(3) All options to purchase real estate, including
supplements, modifications, and amendments of the options, but no
option of that nature shall be recorded if it does not state a
specific day and year of expiration of its validity.
(C) A record of powers of attorney, including all
memoranda of trust, as described in division (A) of section
5301.255 of the Revised Code, that do not describe specific real
property;
(D) A record of plats, in which shall be recorded all
plats and maps of town lots, of the subdivision of town lots, and
of other divisions or surveys of lands, any center line survey of
a highway located within the county, the plat of which shall be
furnished by the director of transportation or county engineer,
and all drawings as provided for in Chapter 5311. of the Revised
Code;
(E) A record of leases, in which shall be recorded all
leases, memoranda of leases, and supplements, modifications, and
amendments of leases and memoranda of leases;
(F) A record of declarations
executed pursuant to section 2133.02 of the
Revised Code
and durable powers of attorney for health care executed pursuant to section
1337.12 of the Revised
Code.
All instruments or memoranda of instruments entitled to
record shall be recorded in the proper record in the order in
which they are presented for record. The recorder may index,
keep, and record in one volume unemployment compensation liens,
internal revenue tax liens and other liens in favor of the United
States as described in division (A) of section 317.09 of the
Revised Code, personal tax liens, mechanic's liens, agricultural
product liens, notices of liens, certificates of satisfaction or
partial release of estate tax liens, discharges of recognizances,
excise and franchise tax liens on corporations, BROKER'S LIENS,
and liens
provided for in sections 1513.33, 1513.37, 3752.13, 5111.021, and
5311.18
of the Revised Code.
The recording of an option to purchase real estate,
including any supplement, modification, and amendment of the
option, under this section shall serve as notice to any purchaser
of an interest in the real estate covered by the option only
during the period of the validity of the option as stated in the
option.
(G) In lieu of keeping the six separate
sets of records
required in divisions (A) to (F) of this section and the
records required in division (H) of this section, a county
recorder may
record all the instruments required to be recorded by this
section in two separate sets of record books. One set shall be
called the "official records" and shall contain the instruments
listed in divisions (A), (B), (C), (E), (F), and
(H) of this section. The second set of records shall
contain the instruments listed in
division (D) of this section.
(H) Except as provided in division (G)
of this section, the county recorder shall keep a separate set of records
containing all corrupt activity lien notices filed with the
recorder pursuant to section 2923.36 of the Revised Code and a
separate set of records containing all medicaid fraud lien
notices filed with the recorder pursuant to section 2933.75 of
the Revised Code.
Sec. 1311.85. AS USED IN SECTIONS 1311.85 TO 1311.93 of the Revised Code:
(A) "BROKER" MEANS AN INDIVIDUAL, PARTNERSHIP, CORPORATION, OR
ASSOCIATION LICENSED AS A REAL ESTATE BROKER PURSUANT TO CHAPTER
4735. of the Revised Code.
(B) "COMMERCIAL REAL ESTATE" MEANS ANY PARCEL OF REAL ESTATE IN
THIS
STATE OTHER THAN REAL ESTATE CONTAINING ONE TO FOUR
RESIDENTIAL UNITS. "COMMERCIAL REAL ESTATE" DOES NOT INCLUDE
SINGLE-FAMILY RESIDENTIAL UNITS SUCH AS CONDOMINIUMS, TOWNHOUSES, MANUFACTURED
HOUSING, OR HOMES IN A SUBDIVISION WHEN SOLD, LEASED, OR OTHERWISE CONVEYED ON
A UNIT-BY-UNIT BASIS, EVEN THOUGH THESE UNITS MAY BE A PART OF A LARGER
BUILDING OR PARCEL OF REAL
ESTATE CONTAINING MORE THAN FOUR RESIDENTIAL UNITS.
"COMMERCIAL REAL ESTATE" ALSO DOES NOT INCLUDE REAL ESTATE OWNED BY A
PUBLIC AUTHORITY AS DEFINED IN SECTION 1311.25 OF THE
REVISED
CODE.
(C) "LIEN PROPERTY" MEANS ANY INTEREST IN COMMERCIAL REAL
ESTATE AGAINST WHICH A BROKER HAS A LIEN PURSUANT TO
SECTIONS 1311.85 TO 1311.93 of the Revised Code.
(D) "OWNER" MEANS A PERSON WHO HAS A LEGAL OR EQUITABLE INTEREST
IN LIEN
PROPERTY AND WHO ENTERS INTO A WRITTEN CONTRACT WITH A BROKER FOR SERVICES
RELATED TO SELLING, LEASING, OR CONVEYING ANY INTEREST IN THE LIEN PROPERTY.
Sec. 1311.86. (A) ANY BROKER THAT ENTERS INTO A WRITTEN
CONTRACT FOR SERVICES RELATED TO SELLING, LEASING, OR CONVEYING
ANY INTEREST IN COMMERCIAL REAL ESTATE HAS A LIEN ON THAT COMMERCIAL REAL
ESTATE. THE LIEN IS EFFECTIVE ONLY IF THE CONTRACT FOR SERVICES IS
IN WRITING AND IS SIGNED BY THE BROKER OR THE BROKER'S AGENT AND THE OWNER OF
THE LIEN PROPERTY OR THE OWNER'S AGENT.
(B)(1) ONLY THE BROKER NAMED IN THE CONTRACT HAS A LIEN
PURSUANT TO THIS SECTION AND A LIEN IS NOT AVAILABLE TO ANY
EMPLOYEE OR INDEPENDENT CONTRACTOR OF THE BROKER.
(2) THE AMOUNT OF THE LIEN IS LIMITED TO THE AMOUNT DUE TO THE
BROKER PURSUANT TO THE CONTRACT. IF THE AMOUNT DUE TO THE BROKER IS PAYABLE
IN INSTALLMENTS, A PORTION OF WHICH IS DUE AFTER CONVEYANCE, THE AMOUNT OF THE
LIEN IS LIMITED TO THE AMOUNT DUE TO THE BROKER PRIOR TO OR UPON
CONVEYANCE.
(3) THE LIEN IS EFFECTIVE ONLY AGAINST THE INTEREST IN REAL
ESTATE THAT IS THE SUBJECT OF THE CONTRACT.
Sec. 1311.87. (A)(1) A LIEN ESTABLISHED PURSUANT TO SECTION
1311.86 of the Revised Code IS
PERFECTED WHEN BOTH OF
THE FOLLOWING HAVE OCCURRED:
(a) THE BROKER IS ENTITLED TO A FEE OR COMMISSION UNDER THE
CONTRACT.
(b) THE BROKER HAS MET THE REQUIREMENTS OF
DIVISION (B) OF THIS SECTION.
(2) THE LIEN IS PERFECTED AS OF THE DATE THE REQUIREMENTS OF
DIVISION (A)(1) OF THIS SECTION ARE MET AND DOES NOT RELATE BACK TO
AN EARLIER DATE.
(B) TO PERFECT A LIEN PURSUANT TO DIVISION (A)(1) OF
THIS SECTION,
A BROKER SHALL COMPLY WITH ALL OF THE
FOLLOWING:
(1) THE BROKER SHALL RECORD A LIEN AFFIDAVIT IN THE COUNTY RECORDER'S
OFFICE OF THE COUNTY IN WHICH THE REAL ESTATE IS LOCATED. THE RECORDER
SHALL RECORD ON THE AFFIDAVIT THE DATE AND PRECISE TIME THE
AFFIDAVIT WAS PRESENTED FOR RECORD, AND SHALL RECORD THE AFFIDAVIT. THE
RECORDER SHALL CHARGE AND COLLECT THE FEES SET FORTH IN SECTION 317.32 OF THE
REVISED CODE
FOR THE RECORDER'S SERVICES.
(2)(a) THE LIEN AFFIDAVIT SHALL INCLUDE THE NAME OF THE BROKER
WHO HAS THE LIEN, THE NAME
OF THE OWNER OF THE LIEN PROPERTY, A LEGAL DESCRIPTION OF THE LIEN PROPERTY,
THE AMOUNT FOR WHICH THE LIEN IS
CLAIMED, THE DATE AND A SUMMARY OF THE WRITTEN CONTRACT ON WHICH
THE LIEN IS BASED, AND THE REAL ESTATE LICENSE NUMBER OF THE
BROKER. THE LIEN AFFIDAVIT SHALL STATE THAT THE INFORMATION CONTAINED
IN THE AFFIDAVIT IS TRUE AND ACCURATE TO THE KNOWLEDGE OF THE SIGNATOR,
BE SIGNED BY THE BROKER OR THE BROKER'S AGENT, AND BE VERIFIED.
(b) FOR PURPOSES OF DIVISION (B)(2)(a)
OF THIS SECTION, A DESCRIPTION THAT IS
SUFFICIENT TO DESCRIBE THE LIEN PROPERTY FOR THE PURPOSE OF
CONVEYANCE, OR IS CONTAINED IN THE INSTRUMENT BY WHICH THE OWNER TOOK TITLE,
IS A
LEGAL DESCRIPTION.
(3) A LIEN AFFIDAVIT BASED ON THE CONVEYANCE OF LIEN PROPERTY SHALL BE
RECORDED PRIOR TO THE CONVEYANCE OF
THE PROPERTY.
(4)(a) A LIEN AFFIDAVIT BASED ON A LEASE OF LIEN PROPERTY SHALL
BE
RECORDED
WITHIN THIRTY DAYS AFTER THE FIRST RENTAL PAYMENT IS DUE UNLESS THE OWNER OF
THE LIEN PROPERTY HAS PROVIDED NOTICE PURSUANT TO
DIVISION (B)(4)(b) OF THIS SECTION.
(b) IF THE OWNER HAS PROVIDED THE BROKER WITH WRITTEN NOTICE OF
THE
INTENDED DATE FOR SIGNING THE LEASE, WHICH IS SERVED ON THE BROKER NO LATER
THAN TEN DAYS PRIOR TO THE INTENDED DATE OF SIGNING THE LEASE EITHER BY
PERSONAL
DELIVERY OR
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, THE BROKER SHALL RECORD THE LIEN
AFFIDAVIT BEFORE THAT DATE.
(5) ON THE DAY THE LIEN AFFIDAVIT IS RECORDED, THE BROKER SHALL PROVIDE A
COPY OF THE LIEN AFFIDAVIT TO THE OWNER OF THE LIEN PROPERTY AND, WHERE A
CONTRACT
FOR THE
SALE OR OTHER CONVEYANCE OF THE LIEN PROPERTY HAS BEEN ENTERED INTO, TO THE
PROSPECTIVE TRANSFEREE, WHERE KNOWN, EITHER BY PERSONAL
DELIVERY OR BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
Sec. 1311.88. (A) TO COMMENCE PROCEEDINGS TO ENFORCE A LIEN, A
BROKER SHALL COMPLY WITH ALL OF THE FOLLOWING:
(1) THE BROKER SHALL FILE A COMPLAINT IN THE
COMMON PLEAS COURT IN THE COUNTY WHERE THE LIEN PROPERTY IS
LOCATED.
(2)(a) THE COMPLAINT SHALL BE FILED WITHIN ONE YEAR FOLLOWING THE
RECORDING OF THE LIEN AFFIDAVIT AS PROVIDED IN DIVISION (B) OF
SECTION 1311.87 of the Revised Code.
(b) FAILURE TO FILE A COMPLAINT WITHIN THE TIME SPECIFIED IN
THIS DIVISION EXTINGUISHES THE LIEN, IN WHICH CASE NO SUBSEQUENT LIEN
AFFIDAVIT MAY BE
RECORDED FOR THE SAME CLAIM AND THE CLAIM MAY NOT BE
ASSERTED IN ANY PROCEEDING UNDER THIS SECTION.
(3) A COMPLAINT SHALL IDENTIFY THE CONTRACT UPON WHICH THE LIEN
IS BASED AND THE DATE OF THE CONTRACT, DESCRIBE THE SERVICES
PERFORMED BY THE BROKER PURSUANT TO THE CONTRACT, SPECIFY THE UNPAID AMOUNTS
DUE TO THE BROKER PURSUANT TO THE CONTRACT, SPECIFY THE ADDRESS OF THE LIEN
PROPERTY, AND
HAVE A COPY
OF THE CONTRACT ATTACHED.
(4) THE BROKER SHALL NAME AS DEFENDANTS IN THE COMPLAINT ALL
PARTIES THAT HAVE A LEGAL OR EQUITABLE INTEREST IN THE LIEN PROPERTY
OF WHOM THE BROKER HAS KNOWLEDGE.
(B)(1) THE OWNER MAY DEMAND THAT THE BROKER COMMENCE
A SUIT TO ENFORCE A BROKER'S LIEN BY SERVING A WRITTEN NOTICE OF
DEMAND ON
THE BROKER BY PERSONAL DELIVERY OR
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
(2) IF THE BROKER DOES NOT COMMENCE THE SUIT OR FILE THE ANSWER
DEMANDED WITHIN TWENTY-EIGHT DAYS AFTER RECEIPT OF THE NOTICE OF DEMAND,
THE LIEN IS EXTINGUISHED.
(C) IN AN ACTION BASED ON A BROKER'S LIEN, A COURT MAY ASSESS
THE NONPREVAILING PARTIES
WITH COSTS AND REASONABLE ATTORNEY'S FEES INCURRED BY THE PREVAILING PARTIES.
THE COURT
SHALL EQUITABLY APPORTION THE ASSESSED COSTS AND ATTORNEY'S FEES AMONG ALL
RESPONSIBLE NONPREVAILING PARTIES.
Sec. 1311.89. (A) ALL LIENS CLAIMED UNDER SECTIONS 1311.85 TO
1311.93 of the Revised Code
SHALL BE SUBJECT TO
SECTION 2323.07 of the Revised Code UNLESS THE PARTIES AGREE TO
PROCEED PURSUANT TO DIVISION (B) OF THIS SECTION.
(B) IF THE BROKER AND OWNER AGREE TO ALTERNATIVE DISPUTE
RESOLUTION (ADR), THE CLAIM SHALL BE HEARD AND RESOLVED IN THE
AGREED UPON ADR FORUM. THE COURT SHALL RETAIN JURISDICTION TO
ENTER AND ENFORCE THE AWARD OR OTHER RESULT OF ADR ON ALL
INTERESTED PARTIES TO THE FORECLOSURE.
Sec. 1311.90. (A) A BROKER SHALL RECORD A WRITTEN RELEASE OR
SATISFACTION OF THE BROKER'S LIEN IN THE COUNTY RECORDER'S OFFICE OF THE
COUNTY IN WHICH THE LIEN WAS RECORDED
WITHIN TEN DAYS AFTER ANY OF THE FOLLOWING:
(1) MONEYS IN AN AMOUNT SUFFICIENT TO RELEASE THE BROKER'S LIEN
ESTABLISHED PURSUANT TO SECTION 1311.86 of the Revised Code HAVE BEEN
DEPOSITED IN AN ESCROW ACCOUNT ESTABLISHED PURSUANT TO SECTION 1311.92 of the Revised Code.
(2) THE OWNER SATISFIES THE CLAIM UPON WHICH THE BROKER'S LIEN IS BASED.
(3) THE BROKER FAILS TO FILE A CLAIM TO ENFORCE A LIEN
WITHIN THE TIME SPECIFIED IN
SECTION 1311.88 of the Revised Code.
(4) THE CLAIM UPON WHICH THE BROKER'S LIEN IS BASED HAS BEEN RESOLVED BY A
WRITTEN AGREEMENT OF THE
BROKER AND OWNER, BY A COURT, OR BY ANY PROCESS AGREED TO BY THE
BROKER AND OWNER.
(B) ON THE DAY THE RELEASE OR SATISFACTION IS RECORDED, THE
BROKER SHALL PROVIDE
THE OWNER WITH A COPY OF THE RELEASE OR SATISFACTION BY PERSONAL DELIVERY OR
BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
Sec. 1311.91. ALL VALID MECHANIC'S LIENS, ARISING PURSUANT TO AND
PERFECTED IN ACCORDANCE WITH CHAPTER 1311. of the Revised Code, AND ALL PRIOR
RECORDED LIENS AND MORTGAGES HAVE PRIORITY
OVER A BROKER'S LIEN PERFECTED PURSUANT TO SECTION 1311.87 of the Revised Code.
Sec. 1311.92. (A) EXCEPT AS PROVIDED IN DIVISION (D) OF
THIS SECTION, TO ENABLE A TRANSFER OF LIEN PROPERTY TO CLOSE WHEN A BROKER'S
PERFECTED LIEN
MAY OTHERWISE PREVENT THE CLOSING, A SEPARATE ESCROW ACCOUNT SHALL BE
ESTABLISHED BY THE OWNER INTO WHICH MONEYS FROM THE
PROCEEDS OF THE
CLOSING SHALL BE DEPOSITED IN AN AMOUNT SUFFICIENT TO
RELEASE THE BROKER'S LIEN. THE MONEYS SHALL BE HELD IN ESCROW
AND SHALL ONLY BE RELEASED AS ORDERED BY A COURT OF COMPETENT
JURISDICTION, OR AS DIRECTED BY AGREEMENT OF THE BROKER AND OWNER OR BY ANY
PROCESS AGREED
TO BY THE BROKER AND OWNER.
(B) AN OWNER MAY NOT REFUSE TO CLOSE A TRANSFER OF LIEN PROPERTY
BECAUSE OF THE
REQUIREMENT TO ESTABLISH AN ESCROW ACCOUNT UNDER DIVISION (A) OF THIS
SECTION. A PROSPECTIVE TRANSFEREE OF LIEN PROPERTY SHALL NOT
REFUSE TO CLOSE THE TRANSFER OF THE LIEN PROPERTY SOLELY BECAUSE THE BROKER
RECORDED A LIEN AFFIDAVIT UNDER THIS SECTION, IF ALL
OF THE FOLLOWING HAVE OCCURRED:
(1) THE OWNER HAS ESTABLISHED THE ESCROW ACCOUNT REQUIRED BY DIVISION
(A) OF THIS SECTION;
(2) THE PROSPECTIVE TRANSFEREE HAS RECEIVED FROM THE ESCROW AGENT FOR THE
ESCROW ACCOUNT REQUIRED BY DIVISION (A) OF THIS SECTION A VERIFIED
STATEMENT THAT THE ESCROW ACCOUNT HAS BEEN ESTABLISHED.
(C) WHEN FUNDS HAVE BEEN PLACED IN ESCROW PURSUANT TO DIVISION
(A) OF THIS SECTION, THE BROKER CLAIMING A BROKER'S LIEN UNDER THIS
SECTION
HAS AN EQUITABLE
LIEN ON THE ESCROWED FUNDS, AND THE LIEN RECORDED ON THE LIEN
PROPERTY SHALL BE EXTINGUISHED AS A MATTER OF LAW.
(D) THE BROKER AND OWNER ARE NOT REQUIRED TO FOLLOW THE ESCROW
PROCEDURES DESCRIBED IN THIS SECTION IF EITHER OF THE FOLLOWING
APPLIES:
(1) AN ALTERNATIVE PROCEDURE IS AVAILABLE THAT WOULD ALLOW THE
TRANSFER OF LIEN PROPERTY TO CLOSE AND THAT PROCEDURE IS ACCEPTABLE TO THE
BROKER AND PROSPECTIVE TRANSFEREE.
(2) THE PROCEEDS FROM THE TRANSFER OF LIEN PROPERTY WOULD BE INSUFFICIENT
TO
RELEASE ALL LIENS, INCLUDING THE BROKER'S LIEN, THAT ARE CLAIMED
AGAINST THE LIEN PROPERTY.
Sec. 1311.93. ANY BROKER THAT ASSERTS OR RECORDS A SPURIOUS OR
MATERIALLY INACCURATE BROKER'S LIEN UNDER THIS SECTION OR FAILS TO RELEASE OR
ACKNOWLEDGE RELEASE OR SATISFACTION OF A BROKER'S LIEN IN COMPLIANCE
WITH THIS SECTION, IS LIABLE
FOR DAMAGES INCURRED BY ANY PERSON WHO HAS A LEGAL OR EQUITABLE INTEREST IN
THE LIEN
PROPERTY.
Section 2. That existing section 317.08 of the Revised Code is hereby
repealed.
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