779.32 Commission liens.

(1) Definitions. In this section:

(a) “Broker" means a real estate broker licensed under ch. 452.

(b) “Commercial real estate" means any real property other than any of the following:

1. Real property containing 8 or fewer dwelling units.

2. Real property that is zoned for residential purposes and that does not contain any buildings or structures.

3. Real property that is zoned for agricultural purposes.

(c) “Financial institution" has the meaning given in s. 214.01 (1) (jn).

(d) “Tenant representation agreement" means an agency agreement between a broker and a person that grants the broker the right to represent the person in the lease of commercial real estate.

(2) Lien. If a broker complies with the notice requirements under sub. (3) and perfects the lien under sub. (4), all of the following apply:

(a) If the broker has earned a commission under a written commercial real estate listing contract, the broker has a lien for the unpaid amount of the commission against the commercial real estate, or the interest in commercial real estate, that is listed with the broker under the contract.

(b) If the broker has earned a commission under a written commercial real estate buyer agency agreement or tenant representation agreement, the broker has a lien for the unpaid amount of the commission against the commercial real estate, or the interest in commercial real estate, that is acquired as a result of the agreement.

(c) If the broker has earned compensation from the owner or landlord under a written agreement for the lease or management of commercial real estate or under a tenant representation agreement, the broker has a lien for the unpaid amount of the compensation against the commercial real estate for which the leasing or management services were provided under the agreement.

(2m) Notice of lien rights.

(a) To claim a lien under sub. (2), the broker shall notify the person who owes the commission or compensation described in sub. (2) (a), (b), or (c) in writing of the right to claim a lien under this section. A broker shall include the notice required under this subsection in the commercial real estate listing contract, commercial real estate buyer agreement, tenant representation agreement, or written agreement for the lease or management of commercial real estate.

(b) The notice required under this subsection shall be in substantially the following form:

NOTICE: A broker has the authority under section 779.32 of the Wisconsin Statutes to file a broker lien for commissions or compensation earned but not paid when due against the commercial real estate, or the interest in the commercial real estate, that is the subject of this agreement.

(3) Notice of interest. In addition to the requirements of sub. (2m), to claim a lien under sub. (2) (a) or (b), the broker shall record a written notice of interest under this section at the office of the register of deeds for the county in which the commercial real estate is located. A notice required under this subsection shall contain the name of each party to the agreement under which the interest is claimed, the date that the agreement was entered into and a description of the commercial real estate that is subject to the lien rights. A notice required under this subsection shall be provided within the following time periods:

(a) In the case of a lien under sub. (2) (a), at least 30 days before the conveyance of the commercial real estate subject to the listing contract.

(b) In the case of a lien under sub. (2) (b), at least 30 days before the conveyance of the commercial real estate subject to the buyer agency agreement.

(4) Perfection of lien.

(a) A lien under this section is perfected when a broker records a lien in the office of the register of deeds for the county in which the commercial real estate is located. The lien must be perfected no later than the following:

1. In the case of a lien under sub. (2) (a) or (b), 30 days after the date that the conveyance documents are recorded with the register of deeds in the county where the real property, that is the subject of the listing contract or buyer agency agreement, is located.

2. In the case of a lien under sub. (2) (c), 90 days after the later of the following:

a. The date that the broker earns a commission or compensation that gives rise to a lien under this section. For purposes of this subd. 2. a., a commission or compensation is considered earned on the date that payment of it is due under the lease, tenant representation agreement, or management agreement.

b. The date that the broker receives notice that he or she has earned a commission or compensation that gives rise to a lien under this section. For purposes of this subd. 2. b., a commission or compensation is considered earned on the date that the payment of it is due under the lease, tenant representation agreement, or management agreement.

(b) The lien shall be signed by the broker and shall include all of the following information:

1. The name and license number of the broker.

2. The name of the owner or acquirer of the commercial real estate that is subject to the lien.

3. The legal description of the commercial real estate that is subject to the lien.

4. The amount of the lien at the time the lien is recorded.

(c) A broker shall mail a copy of the lien to the owner or acquirer of the commercial real estate that is subject to the lien within 72 hours after the recording of the lien under par. (a). A lien under this section is effective only from the date that it is perfected under this subsection.

(d) A lien that is perfected under this subsection by a broker secures all unpaid commissions or compensation that is due that broker with respect to the commercial real estate subject to that lien, regardless of whether the commission or compensation was earned at the time the lien was recorded.

(4m) Duty of register of deeds. If a lien meets the requirements under sub. (4), the register of deeds shall accept the lien for recording. The register of deeds shall index the lien under the name of the owner or acquirer of the commercial real estate who is subject to the lien. If the register of deeds maintains a tract index, the register of deeds shall also index the lien under the legal description of the real estate against which a lien is claimed.

(5) Priority. A lien under this section shall have priority over all other liens on the commercial real estate, except tax and special assessment liens, liens created under subch. I of ch. 779, purchase money mortgages, liens that are filed or recorded before the lien under this section is perfected and any other lien given priority under the law.

(8) Satisfaction of the lien.

(a) Upon the request of any person interested in the real estate that is the subject of a lien under this section, the broker shall execute and deliver a satisfaction of lien to the interest party, if one of the following conditions is met:

1. The person owing the commission or compensation pays the broker in full the amount specified in the lien.

2. The person owing the commission or compensation pays an amount equal to 125 percent of the commission or compensation owed into the trust account of the broker, the trust account of any attorney who does not represent any party to the dispute and who is in good standing with the State Bar of Wisconsin, or to a mutually agreed-upon 3rd party. The moneys shall be held in escrow until disbursed pursuant to the written mutual agreement of the parties or pursuant to a court order.

3. If the parties to the contract or agreement giving rise to the lien agree to binding arbitration regarding the disputed commission or compensation and if the parties to the contract or agreement, other than the broker, agree to pay all of the costs of the arbitration.

(am) The satisfaction of lien shall include the information listed in sub. (4) (b) 1. to 3.

(b) The satisfaction of lien shall be recorded with the register of deeds.

(c) A broker is liable to a person requesting a lien satisfaction under this subsection for a sum equal to 50 percent of the sum claimed in the lien claim, if the broker does not provide the requested satisfaction within 30 days of the later of the following:

1. The date on which the request is received by the broker.

2. If the satisfaction is required under par. (a) 1., the date on which the broker receives payment in full of the amount specified in the lien.

3. If the satisfaction is required under par. (a) 2., the date on which the broker receives evidence that the requirements under par. (a) 2. have been met.

4. If the satisfaction is required under par. (a) 3., the date on which the broker receives the agreement to binding arbitration.

5. If the satisfaction is required under par. (a) 3., the date on which the broker receives evidence of payment of the arbitrator's fee.

(9) Extinguishment of notice of interest. A notice of interest expires and is extinguished if a new notice of interest is not recorded under sub. (3) within 2 years after the recording of the original notice of interest. A notice of interest may be rescinded by the recording of a notice with the register of deeds in the county where the real property is located, indicating that the broker is no longer claiming an interest under this section. A broker shall record a notice rescinding the notice of interest if the contract or agreement under which the interest was created expires or is terminated.

(10) Foreclosure of lien; procedure, parties. In the foreclosure of a lien under this section, ch. 846 shall control as far as applicable. All persons who have recorded a lien under this section may join as plaintiffs, and if any do not join they may be made defendants. All persons having liens subsequent to such lien may be joined as defendants. If any person who is a proper party is not a party to the action the person may, at any time before judgment, be made a defendant, and any person who after the commencement of the action obtains a lien or becomes a purchaser may, at any time before judgment, be made a defendant.

(11) Waiver of lien. A broker may waive the lien under this section in writing signed by the broker, but no action or agreement between any other persons may invalidate the lien, other than the payment in full to the broker of the commission or compensation to which the lien relates.

History: 1997 a. 309; 2001 a. 103; 2009 a. 348.