This rather strange series of events befell one of my clients recently, which called for quick, and somewhat aggressive action. Any time I encounter a situation for the first time (after helping brokers for four plus decades), it usually makes for an unusual story. This single tenant retail property in west suburban Illinois had been vacant and was listed by my client for more than 10 months, but a new tenant was located, a long term lease signed, and it seemed all parties were pleased. My client happily invoiced for the first half of the commission due upon lease execution, when the owner’s attorney happened to mention that a sale of the property was forthcoming…make that imminent, meaning in about three days. This prompted the somewhat worried late Friday afternoon call, and I was referred to the owner’s attorney, who confirmed the imminent closing, and warned me that a broker lien to protect our commission (low six figures), would not be well received. Well, if any of you Readers have a solution to protect a large commission in the face of imminent sale that does not involve a broker lien, be sure and give me a call.

I explained to the owner’s counsel, both Friday afternoon in a lengthy call, and again in a carefully written email on the following Monday morning, that since the broker had no written agreement with the buyer, the only protection we could see was a lien, to be partially released with each payment of the fee, first the half due at execution, then months later when the rent commenced and the second half became due and payable. I explained that we had no contract with the buyer, therefore no protection for the second portion of the fee; and with the property sold, limited recourse against the present owner. My carefully written (and temperate) email to the Seller’s attorney went unanswered. Yes, I had drafted the lien immediately, had it in my client’s hands, and when my email was ignored, and my follow up call to the Seller’s attorney was not answered, you guessed it, off to the Recorder’s office went my client; and the lien was recorded.

I carefully served the lien on the owner, to its registered agent per the Secretary of State’s website, to our client’s asset manager with whom we were dealing, and also-by email-to that same seller’s attorney who had gone silent on me. Yes, sometimes the devil is in the details, so I share the fact that I had sent copies of the recorded lien to all of these people, quickly as well as by certified mail, return receipt requested, because that is what the lien statute requires. In fact, the extra email to the seller’s attorney was my idea — a bit of extra caution. I love it when I play a hunch and it pans out. No one responded to emails or calls, and we watched the Recorder’s website, where our lien was posted, but for some time, no deed. Could it be that the sale didn’t close?

The next contact was from an attorney (based in a smaller, non-Chicago but midwestern state market) claiming to represent the buyer, who told me his client would address the commission issue, he just wanted to see a copy of our lien, which I promptly shared with him. The offer came fairly quickly: release the entire lien and the buyer would pay us half of the fee now, and half of the fee in 6 months; with no security offered for the second half of the fee. I had done my due diligence when I learned the identity of the buyer from its counsel, and surprise, surprise, that buyer did not enjoy a stellar reputation in its own home market. My contacts in that smaller market warned me, “Yes, I had to lien him to get paid,” told me what I needed to know. So, no release now for funds later. No Wimpy, I do not accept your offer to sell you a hamburger today if you will gladly pay me next Tuesday.

The standoff continued; the parties spoke directly without the “help” of counsel, no agreement, no payment, no release of lien. Then came an offer from buyer’s counsel, this time with half payment now, release of the entire lien, and escrow of the second half — which would make sense if the broker had a lien on the escrowed funds. That term was agreed, and we thought we had a deal! Commission to come as expected, no need to foreclose the lien, no need to litigate…but the buyer retraded, our settlement cratered, and I drafted my broker lien foreclosure complaint. I shared it with both the seller’s and buyer’s attorneys. Next, the buyer’s attorney referred me to the title company’s claims counsel…Claims counsel? Who could be making title claim?

I spoke with the claims counsel, confirmed the deal had indeed closed, that the seller never disclosed the lien on the property to the buyer or to the title company — which the title company never saw because my lien beat the deed to the Recorder’s office. My lien was recorded two days before the deal closed, but well ahead of the deed which was finally recorded weeks later. I also reasoned, and shared with claims counsel, that the seller’s statement that there were no liens was clearly false, that I made sure the seller’s attorney had a copy of the recorded lien before closing. This means that IF the buyer was not aware of the lien, and IF the buyer relied on the title company and the seller’s statement, then it was the seller who has concealed the existence of the lien, so the title company truly had no exposure. The next call came from the buyer’s counsel, and while he never admitted that his client had made a title claim or that the claim had been summarily denied, this time, my offer of settlement with: (a) payment of the first half of the fee; (b) escrow of the second half; (c) release of the recorded lien; but (d) a voluntary lien on the escrowed funds, was now acceptable. And this time the seller paid a good portion of the attorney fees my client had incurred due to its delay.

So, think about the following when you learn a property is to be sold when you have unpaid fees. Secure those fees with a lien, which you will happily release in exchange for payment — because once that deal closes, your recourse against the seller is limited. This is NOT a statement to lien first and ask questions later. Note that there was plenty of communication with that seller’s attorney as to what we wanted, what we would do, and how we could help the deal close while protecting our fee. The seller tried to close around us — apparently to avoid paying my client — and did not succeed. Bear in mind that if/when your client’s property is sold, your ability to recover unpaid fees from the seller goes down very quickly. Plan for the future; and be a part of the closing and part of the solution; but don’t be shy. There are parties out there who just might not pay your fee. Shocking.

Another win for truth, justice, and the American way.