Sec. 20-325a. Actions to recover commissions arising out of real estate transactions. Real estate broker's lien for real property. Claim for lien. Provisions re commercial real estate transactions
Sec. 20-325a. Actions to recover commissions arising out of real estate transactions. Real estate broker's lien for real property. Claim for lien. Provisions re
commercial real estate transactions. (a) No person who is not licensed under the
provisions of this chapter, and who was not so licensed at the time the person performed
the acts or rendered the services for which recovery is sought, shall commence or bring
any action in any court of this state, after October 1, 1971, to recover any commission,
compensation or other payment with respect to any act done or service rendered by the
person, the doing or rendering of which is prohibited under the provisions of this chapter
except by persons duly licensed under this chapter.
(b) No person, licensed under the provisions of this chapter, shall commence or
bring any action with respect to any acts done or services rendered after October 1,
1995, as set forth in subsection (a), unless the acts or services were rendered pursuant
to a contract or authorization from the person for whom the acts were done or services
rendered. To satisfy the requirements of this subsection any contract or authorization
shall: (1) Be in writing, (2) contain the names and addresses of the real estate broker
performing the services and the name of the person or persons for whom the acts were
done or services rendered, (3) show the date on which such contract was entered into
or such authorization given, (4) contain the conditions of such contract or authorization,
(5) be signed by the real estate broker or the real estate broker's authorized agent, (6)
if such contract or authorization pertains to any real property, include the following
statement: "THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN
LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES", and (7) be signed by the person or persons for whom the acts were
done or services rendered or by an agent authorized to act on behalf of such person or
persons, pursuant to a written document executed in the manner provided for conveyances in section 47-5, except, if the acts to be done or services rendered involve a listing
contract for the sale of land containing any building or structure occupied or intended
to be occupied by no more than four families, the listing contract shall be signed by the
owner of the real estate or by an agent authorized to act on behalf of such owner pursuant
to a written document executed in the manner provided for conveyances in section 47-5.
(c) Notwithstanding the provisions of subsection (b) of this section, no person licensed under the provisions of this chapter shall commence or bring any action with
respect to any acts done or services rendered after October 1, 2000, in a commercial
real estate transaction, unless the acts or services were rendered pursuant to (1) a contract
or authorization meeting the requirements of subsection (b) of this section, or (2) a
memorandum, letter or other writing stating for whom the licensee will act or has acted,
signed by the party for whom the licensee will act or has acted in the commercial real
estate transaction, the duration of the authorization and the amount of any compensation
payable to the licensee, provided (A) the licensee provides written notice to the party,
substantially similar to the following: "THE REAL ESTATE BROKER MAY BE
ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF
THE CONNECTICUT GENERAL STATUTES", and (B) the notice is provided at or
before the execution of the contract, authorization, memorandum, letter or other writing,
and may be made part of the contract, authorization, memorandum, letter or other
writing.
(d) Nothing in subsection (a) of this section, subdivisions (2) to (7), inclusive, of
subsection (b) of this section or subsection (c) of this section shall prevent any licensee
from recovering any commission, compensation or other payment with respect to any
acts done or services rendered, if it would be inequitable to deny such recovery and
the licensee (1) has substantially complied with subdivisions (2) to (7), inclusive, of
subsection (b) of this section or (2) with respect to a commercial real estate transaction,
has substantially complied with subdivisions (2) to (6), inclusive, of subsection (b) of
this section or subdivision (2) of subsection (c) of this section.
(e) A licensed real estate broker who has performed acts or rendered services relating to real property upon terms provided for in a written contract or agreement between
the broker and the owner or buyer for whom such acts were done or services rendered
shall have a lien upon such real property. The lien shall be in the amount of the compensation agreed upon by the broker and the owner or buyer for whom such acts were performed or services rendered.
(f) Except as provided in subsections (g), (h) and (i) of this section, the lien provided
for in this section shall not attach until the broker is entitled to compensation, without
any contingencies, other than closing or transfer of title, under the terms set forth in the
written listing or buyer representation contract and the broker has recorded the claim
for lien prior to the actual conveyance or lease of such real property with the town clerk
of the town where such property is located.
(g) Except as provided in subsection (h) of this section, when a broker is entitled
to compensation in installments, a portion of which is due only after the conveyance or
lease of the real property, any claim for lien for those payments due after the conveyance
or lease may be recorded at any time subsequent to the conveyance or lease of the real
property and prior to the date on which the payment is due but shall only be effective
as a claim for lien against the real property to the extent moneys are still owed to the
transferor or lessor by the transferee or lessee. A single claim for lien recorded prior to
conveyance or lease of the real property claiming all moneys due under an installment
payment agreement shall not be valid or enforceable as it pertains to payments due after
the conveyance or lease. The lien shall attach as of the recording of the claim for lien.
(h) In the case of a lease for real property where the broker's compensation will not
be paid in installments, the claim for lien must be recorded no later than thirty days after
the tenant takes possession of the leased premises unless written notice of the intended
signing of the lease is delivered to the broker entitled to claim a lien by registered or
certified mail, return receipt requested, or by personal service, at least ten days prior to
the date of the intended signing of the lease for the real property in which case the claim
for lien must be recorded before the date indicated for the signing of the lease in the
notice delivered to the broker. The lien shall attach as of the recording of the claim
for lien.
(i) If a broker's written contract for payment is with a prospective buyer, then the
lien shall attach only after the prospective buyer accepts the conveyance or lease of the
real property and the claim for lien is recorded by the broker with the town clerk of the
town in which the property is located. Any claim for lien shall be filed by the broker no
later than thirty days after the conveyance or the tenant takes possession of the real
property.
(j) The broker shall serve a copy of the claim for lien on the owner of the real
property. Service shall be made by mailing a copy of the claim for lien by registered or
certified mail, return receipt requested, or by personal service upon the owner by any
indifferent person, state marshal or other proper officer, by leaving with such owner or
at the owner's usual place of abode a true and attested copy thereof. A copy of the claim
for lien may be served at the same time as the notice required by subsection (r) of this
section. The broker's lien shall be void and unenforceable if recording does not occur
within the time period and in the manner required by this section.
(k) (1) A broker may bring suit to enforce a claim for lien in the superior court in
the judicial district where the real property is located by filing a complaint and sworn
affidavit that the claim for lien has been recorded in accordance with this section.
(2) A person claiming a lien shall, unless the claim is based upon an option to
purchase the real property, within one year after recording the claim for lien, commence
foreclosure by filing a complaint. Failure to commence foreclosure within one year after
recording the lien shall extinguish the lien. No subsequent claim for lien may be given
for the same claim nor may that claim be asserted in any proceedings under this section.
(3) A person claiming a lien based upon an option to purchase real property shall,
within six months after the conveyance or lease of the real property under the exercise
of the option to purchase, commence foreclosure by filing a complaint and a sworn
affidavit that the claim for lien has been recorded in accordance with this section. Failure
to commence foreclosure within six months after the conveyance or lease shall extinguish the claim for lien. No subsequent claim for lien may be given for the same claim
nor may that claim be asserted in any proceedings under this section.
(4) The plaintiff shall issue summons and provide service as in actions to foreclose
a mortgage. When any defendant resides out of the state or is temporarily located out
of the state, or on inquiry cannot be found, or is concealed within this state so that process
cannot be served on that defendant, the plaintiff shall cause a notice to be given to that
defendant, or cause a copy of the complaint to be served upon that defendant, in the
manner and upon the same conditions as in actions to foreclose a mortgage. Except as
otherwise provided in this section, all liens claimed under this section shall be foreclosed
in the manner in which mortgage foreclosures are conducted.
(l) The claim for lien shall state the name of the claimant, the name of the owner,
a description of the real property upon which the lien is being claimed, the amount for
which the lien is claimed, and the real estate license number of the broker. The claim
for lien shall contain a sworn statement by the signatory that the information contained
in the notice is true and accurate to the knowledge of the signatory. The claim for lien
shall be signed by the broker or the real estate broker's authorized agent.
(m) Whenever a claim for lien has been recorded with the town clerk and a condition
occurs that would preclude the broker from receiving compensation under the terms of
the broker's written contract or agreement, the broker shall provide within thirty days
of demand to the owner of record a written release or satisfaction of the lien.
(n) Upon written demand of the owner or the owner's authorized agent, served on
the broker claiming the lien requiring suit to be commenced to enforce the lien, a suit
shall be commenced within forty-five days thereafter or the claim for lien shall be extinguished. Service of any such written demand shall be by registered or certified mail,
return receipt requested, or by personal service upon the broker by any indifferent person,
state marshal or other proper officer, by leaving with such broker or at the broker's usual
place of abode a true and attested copy thereof.
(o) Whenever a claim for lien has been recorded with the town clerk and is paid,
or where there is failure to foreclose to enforce the lien within the time provided by this
section, the broker shall acknowledge satisfaction or release the claim for lien, in writing,
on written demand of the owner within thirty days after payment or expiration of the
time in which to commence foreclosure on the lien.
(p) Except as otherwise provided in this section, whenever a claim for lien has been
recorded with the town clerk that would prevent the closing of a conveyance or lease,
an escrow account shall be established from the proceeds of the conveyance or lease in
the amount of the compensation agreed upon by the parties. Upon the establishment of
the escrow account the broker shall immediately release the claim for lien. The establishment of an escrow account, as provided for in this section, shall not be the sole cause
for the owner to refuse to complete the conveyance or lease. The moneys shall be held
in escrow by the attorney for the lessor in the case of a lease for real property, and by
the attorney for the owner in the case of the actual conveyance or lease of such real
property, until the parties' rights to the escrowed moneys have been determined by the
written contract or agreement of the parties, a determination by the Superior Court, or
some other process which may be agreed to by the parties. When there are sufficient
funds in the amount of the claimed lien, there shall be a release of the claim for lien which
would allow completion of the conveyance or lease on such terms as are acceptable to
the parties involved in the conveyance or lease. If the proceeds from the conveyance or
lease are insufficient to release all liens claimed against the real property, including the
broker's claim for lien, then the parties are not required to establish the escrow account
under this section.
(q) The provisions of subsections (a) and (b) of this section shall not apply to any
(1) person excepted from the provisions of this chapter by section 20-329 with respect
to any acts performed by the person which are included in such exception; or (2) real
estate broker or real estate salesperson who has provided services to the federal government, any political subdivision thereof, or any corporation, institution or quasi-governmental agency chartered by the federal government.
(r) No broker is entitled to claim any lien under this section unless (1) after the
broker is entitled to compensation, without contingencies other than closing or transfer
of title, under the terms set forth in the written contract and not later than three days
prior to the later of the date of the conveyance or lease as set forth in the real estate sales
contract or lease or the actual date of the conveyance or the date when the tenant takes
possession, the broker gives written notice of the claim for lien to the owner of the real
property and to the prospective buyer or tenant that the broker is entitled to compensation
under the terms set forth in the written contract and intends to claim a lien on the real
property, or (2) the broker is unable to give written notice pursuant to subdivision (1)
of this subsection because the identity of the prospective buyer or tenant cannot be
ascertained by the broker after due diligence and reasonable effort. The notice shall be
served upon the owner and upon the prospective buyer or tenant by any indifferent
person, state marshal or other proper officer, by leaving with such owner and prospective
buyer or at their usual places of abode a true and attested copy thereof. When there are
two or more owners, or two or more prospective buyers, the notice shall be served on
each owner and on each prospective buyer unless the identity of the prospective buyer
cannot be ascertained by the broker after due diligence and reasonable effort.
(1971, P.A. 378, S. 1-3; 1972, P.A. 175; P.A. 73-29; P.A. 84-137; P.A. 85-166, S. 1, 2; P.A. 93-355, S. 1; P.A. 94-240, S. 3, 14; P.A. 95-164; 95-186, S. 1; P.A. 00-21, S. 1; 00-99, S. 58, 154; 00-160, S. 2; P.A. 02-24, S. 12, 13; P.A. 04-131, S. 1.)
History: 1972 act deleted word "such" in Subsec. (b) modifying "person", "action" and "acts"; P.A. 73-29 made Subsec.
(b) applicable to persons "licensed under the provisions of this chapter" and added phrase "as set forth in subsection (a)";
P.A. 84-137 amended Subsec. (b) to require that the authorization or contract be signed by the seller or his duly authorized
agent and the broker or his authorized agent rather than by the "parties thereto"; P.A. 85-166 amended Subsec. (b) to
require that the contract or authorization be signed by the owner, rather than the seller, and clarified the scope of authority
of any agent permitted to act on his behalf; P.A. 93-355 added provisions re real estate broker's liens on commercial real
property as Subsec. (b)(6) and Subsecs. (c) to (n), inclusive, and Subsec. (p), relettering former Subsec. (c) as (o); P.A.
94-240 amended Subsec. (b) by requiring that contract be signed by the real estate broker or the broker's authorized agent,
added a new Subsec. (b)(6) requiring a lien rights statement to be included in a commercial real property contract or
authorization and (b)(7) requiring the listing contract for the sale of real estate be signed by the owner of the property or
an agent authorized to act on his behalf, inserted new Subsec. (c) regarding the recovery of commission, compensation or
other payment with respect to acts done or services rendered if the broker has substantially complied, relettered the remaining
Subsecs., redefined "commercial real property" in Subsec. (d), added a provision in Subsec. (i) regarding the service of a
claim for lien and made minor changes for clarity, effective July 1, 1994; P.A. 95-164 amended Sub. (b)(7) to eliminate
the requirement that the listing contract for the sale of real estate be signed by the owner of the property or an agent
authorized to act on his behalf and substituted a provision requiring a signature by the person or persons for whom the acts
were done or services rendered, except in the sale of land intended for residential use, in which case the owner of the real
estate or an authorized agent is required to sign the contract; P.A. 95-186 amended Subsec. (b) by changing the applicable
date from July 1, 1994, to October 1, 1995, deleted references to "commercial real property" and substitute "any real
property" in Subsecs. (b), (d) to (k), inclusive, (o) and (q), in Subsec. (d) deleted definition of "commercial real property"
and in Subsec. (h) made a technical correction by changing the reference to "(8)" to "(q)"; P.A. 00-21 amended Subsecs.
(a), (b) and (c) by substituting "the person" for "him" and "he" and substituting "with respect to" for "in respect of"; P.A.
00-99 replaced references to sheriff with state marshal in former Subsecs. (i), (m) and (q), redesignated as Subsecs. (j),
(n) and (r), effective December 1, 2000; P.A. 00-160 deleted reference to Sec. 20-325a(d) in Subsec. (b), inserted new
Subsec. (c) re commercial real estate transactions, redesignated former Subsecs. (c) to (q), inclusive, as Subsecs. (d) to (r),
respectively, amended Subsec. (d) to insert proviso re inequity of denying recovery and provisions re substantial compliance
with certain provisions of section with respect to commercial real estate transaction, substituted "owner or buyer" for
"owner" in Subsec. (e), amended Subsec. (f) to substitute "written listing or buyer representation contract" for "written
contract", amended Subsec. (r) to require written notice after the later of the conveyance date set forth in the contract or
lease or the actual date of conveyance or date when the tenant takes possession, and substituted "with respect to" for "in
respect of" in Subsecs. (a), (b) and (d) and made other technical changes throughout the section; P.A. 02-24 amended
Subsec. (b)(7) to provide that the listing contract be signed for acts or services that involve a listing contract, and made
technical changes in Subsecs. (c) and (r); P.A. 04-131 amended Subsec. (g) to delete "from the owner of real property" re
broker entitled to compensation and referenced the lessor or lessee re moneys still owed, amended Subsec. (h) to add
"where the broker's compensation will not be paid in installments", amended Subsec. (k) to add Subdiv. designators (1)
to (4), inclusive, and amended Subdiv. (3) to add "real property" re purchase and substitute "six months after the conveyance
or lease" for "this time", amended Subsec. (l) to allow claim for lien to be signed by real estate broker's authorized agent,
inserted Subdiv. designators (1) and (2) in Subsec. (q), amended Subsec. (r) to insert Subdiv. designators (1) and (2), insert
in Subdiv. (2) an exception if broker is unable to give written notice because identity cannot be ascertained after due
diligence and reasonable effort, make conforming changes and substitute "prospective buyer" for "buyer", and made
technical changes in Subsecs. (e), (i), (k), (n), (p), (q), and (r).
See Sec. 20-325e re hearings re commercial real property claims for liens, foreclosures and judicial intervention.
See Sec. 20-325k re commissions on commercial real estate lease transactions.
Section pertains only to listing contracts and not to the sales contract. 186 C. 82. Plaintiff's cause of action arose out
of his employment contract with the defendant and was not an action seeking to recover a commission from a real estate
transaction. 190 C. 808. Cited. 191 C. 276. Cited. 203 C. 475. Cited. 213 C. 612. Cited. 218 C. 512. Cited. 232 C. 645.
Cited. 236 C. 746. Although plaintiff, a corporate broker licensee, was not duly licensed as a real estate broker because
its president was not licensed as a real estate broker, trial court improperly granted summary judgment on the ground that
plaintiff's license was automatically void, which alone was insufficient to deprive plaintiff of its right to recover a commission; trial court failed to consider language and legislative history of former Subsec. (c), which permits licensee who is
not duly licensed to recover if, in light of all facts and circumstances of the case, it would be inequitable to deny the right
to recover commission that was otherwise earned. 273 C. 766. Section eliminates a separate equitable recovery under
common law theory of unjust enrichment; however, substantial compliance requirement in Subsec. (d) is sole avenue to
recovery that legislature chose to provide in circumstances wherein strict construction of this section would lead to unfair
results of unjust enrichment. 287 C. 706.
Cited. 6 CA 720. Cited. 7 CA 709. Cited. 9 CA 293. "... an agreement between brokers is not subject to requirements
of the statute". 11 CA 557. Cited. 13 CA 527. Cited. 17 CA 294. Cited. 24 CA 250. Cited. 25 CA 51. Cited. 28 CA 563.
Cited. 31 CA 682. Cited. 35 CA 31. Cited. 36 CA 653. Requirements of statute mandatory except where equitable estoppel
applies and real estate broker believed the contract was validly extended. 50 CA 640. Trial court's determination that
plaintiff had not established the statutorily required inequity in denying recovery of commission was not clearly erroneous
or an abuse of discretion. 69 CA 220.
Section acts as a restriction on the conduct of an occupation which, were it not for the statute, would be allowed, and
must be strictly construed. 35 CS 220. Cited. 38 CS 509. Cited. 41 CS 225.
Subsec. (a):
Cited. 215 C. 316. Cited. 218 C. 396. Although section sets forth a necessary condition for filing action to recover a
commission, namely, that person filing the action be licensed under chapter's provisions, compliance with that condition
is not, in and of itself, sufficient to permit recovery. 266 C. 572.
Cited. 3 CA 675. Cited. 5 CA 76.
Subsec. (b):
Cited. 178 C. 381. Cited. 184 C. 228. Cited 185 C. 463. Cited. 186 C. 74. Requirements of this section apply to listing
contract, not sales contract. 186 C. 237. Cited. 189 C. 52. Requirements of the statute concerning actions to recover real
estate commissions are not applicable to action by real estate salesman seeking a share of commissions from his employer.
190 C. 808. Cited. 197 C. 264. Cited. 213 C. 612. "owner" as used in subsection refers to owner of the property interest
that is the subject of the listing agreement. 232 C. 645. Requirement that the agent signatory to a listing agreement be
authorized by written document to act on behalf of the owner applies where owner may act individually or through an
agent and chooses to act through an agent. 258 C. 121.
Cited. 7 CA 120. Cited. 8 CA 371. Cited. 9 CA 87. Subdiv. (4): Location and price of units not necessary in order to
state "conditioning of such contract or authorization" in this instance where owner reserved right to determine price and
specific unit. Id., 293. Cited. 23 CA 688. Listing agreement was unenforceable because it was not in strict compliance
with statute and did not reflect any authorization for general partners to sign as agents authorized to act on behalf of the
owner. Statute, as amended by P.A. 94-240 which permits recovery of commissions in cases of substantial compliance
with the statute, applies prospectively only because there is no clear and unequivocal language in act or legislative history
that supports an inference in favor of retrospective application. 56 CA 815. Where listing agreement was mistakenly filled
in but was nevertheless signed by the authorized agent of the broker, it was held that the agreement complied with this
section. 75 CA 546.
Separate documents, rather than a single contract, may collectively meet statutory requirements of this subsection. 35
CS 24. Cited. Id., 220. Action by broker to recover commission prohibited due to failure to comply with requirement that
addresses of all parties be contained in contract. Id., 617. Merely obtaining a binding executory contract is insufficient to
entitle a broker to a commission where the commission was expressly made dependent upon the actual sale of the property.
36 CS 532. Subdiv. (4): Broker was not entitled to a commission where the listing agreement made the commission
conditional upon the actual consummation of the sales transaction and the sale never took place. Id. Cited. 37 CS 703.
Cited. 38 CS 655 (Diss. Op.); Id., 703. The legislature in enacting this statute, made no distinction between straight real
estate sales and those integrated with commercial transactions. 39 CS 95.
Subsec. (d):
Substantial compliance allowance under this Subsec. contemplates written agreements only. 287 C. 706.
On basis of this Subsec., it would be inequitable to deny plaintiff recovery on basis of mistaken name of the partnership
in an exclusive agreement with respect to commercial real property. 88 CA 445.