6A — October 11 - 24, 2013 — Mid Atlantic Real Estate Journal


d el M AR V A

2013 C alendar e ditorial and a dvertising F oCus

By Brent Shaffer Esq., Young Conaway Stargatt & Taylor delawarepermitscommercial real estate broker’s liens R egardless of your view of whether commer- cial real estate brokers

Code as Title 25, Chapter 26, available at http://delcode. delaware.gov/title25/c026/ index.shtml (I’ll refer to it as the “Act”). Maryland’s com- mercial real estate broker’s lien statute applies only to leasing commissions, but similar to Pennsylvania’s, Delaware’s Act pertains to both sale and leasing transac- tions. Unlike Pennsylvania’s law, the Act can also be used to enforce payments to a broker for “management” and other services for “con- veyance or acquisition of commercial real estate.” The “broker” claiming the lien must be an individual who holds a broker license from the Delaware Real Estate Commission and who is self- employed or employed direct- ly or indirectly by a brokerage organization. The broker’s agreement must have been signed on or after August 1, 2013 (or earlier only if the parties agree in writing). Delaware’s definition of “com- mercial real estate” to which the Act applies includes any real estate with improve- ments other than one to four residential units; unimproved

land zoned or available for commercial, manufacturing, industrial, retail or multi- family use; unimproved land of any zoning classification being purchased for develop- ment or subdivision other than land with four or fewer single-family residential lots; and even real estate used for agricultural purposes un- less the purchaser is buying the property for the purpose of continuing agricultural use. This is broader than in Maryland (where the lien ap- plies only to real estate with building floor space intended to be used by the tenant for non-residential use). Penn- sylvania defines “commer- cial real estate” subject to a broker’s lien more simply – any real estate other than real estate containing one to four residential units or real estate zoned agricultural not subject to an agreement of sale contingent upon rezon- ing to non-agricultural uses. Delaware clarifies that itsAct also applies to mixed-use real estate, including real estate with one to four residential units that also has another continued on page 18A

need a right to impose a special lien against real estate, the time for de- bate on the sub j e c t i s over in Dela- ware, as the

Brent Shaffer

Delaware Commercial Real Estate Broker ’s Lien Act became effective August 1, 2013. This new law gives brokers the ability to quickly place a lien on real estate for commissions – previously brokers had to sue for pay- ment and attain a court judg- ment first. While Delaware waited longer than its two closest neighboring states to establish a statutory lien for commercial real estate brokers – Pennsylvania did so in 1998 and Maryland in 1994 – in certain respects the protections for brokers in Delaware are the broadest of the three. The Delaware Commercial Real Estate Broker’s LienAct is codified in the Delaware

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