Liens on Residential Property for Brokerage Fees

QUESTION: If a seller decides not to pay a listing agency its commission on a residential listing, can the listing agency put a lien on the property prior to closing?

ANSWER: No, not on a residential listing. Although certain persons are entitled to a lien against real property if they provide certain services or materials to the property, the  N.C. lien laws do not allow a real estate agent to place a lien on residential real property for commissions which the agent claims have been earned in connection with the  sale of the property. If the listing agency did file a lawsuit against the seller prior to closing, the mere existence of the suit would not affect the title to the property itself and  therefore would not impact the seller’s ability to convey good title to the property. If the listing agency eventually wins the suit, the agency would be entitled to have the  judgment satisfied out of assets owned by the seller on and after the date the judgment was obtained.

NOTE: Effective October 1, 2011, the law permits a broker to place a lien for a brokerage commission upon commercial real estate that is the subject of a written agreement  for brokerage services. The Commercial Real Estate Broker Lien Act makes up part 4 of Article 2 of Chapter 44A of the North Carolina General Statutes. The Act can be  found on the General Assembly’s website.

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Filed Under: Fees/Commissions,