Q: I am a real estate broker and I was working on a commercial leasing transaction where the landlord had given me an exclusive listing to lease its retail space. I successfully found a tenant and a five year lease was fully signed. The landlord still has not paid me my real estate commission even though our listing agreement stated that I was to be paid a portion of my commission at lease execution. Can I file a mechanic’s lien on the building where the retail space is located in order to ensure or enforce the payment of my commission?
A: Yes, a real estate broker who is not paid a commission in a commercial leasing transaction may have the right to place a mechanic’s lien on a building where certain requirements are met. Specifically, New York Lien Law Article 2, Section 2, provides that a real estate broker may file a mechanic’s lien if the following three conditions are met:
- There was a written contract of brokerage employment or compensation by and between the owner and the real estate broker;
- The lease was for a term of more than three (3) years; and
- The lease was for real property other than for residential purposes.
Important Tip: Prior to filing a mechanic’s lien, a real estate broker must consult with an attorney. There are particular steps that must be followed in order to create a valid lien and, if the mechanic’s lien is not warranted, the real estate broker could be responsible to the owner for significant damages,
The Legal Line Question by:
Neil B. Garfinkel
REBNY Broker Counsel
Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP