(a) The obligation of a subsequent owner shall be subject to the terms, conditions and defenses available to the contracting parties. A subsequent owner shall be liable for the fees or commissions only to the extent that the subsequent owner receives rents pursuant to leases with respect to which the broker is entitled to receive a fee or commission under the written contract referenced in the notice provided for in § 62-13-501.
Terms Used In Tennessee Code 62-13-503
- Broker: means any person who, for a fee, commission, finders fee or any other valuable consideration or with the intent or expectation of receiving a fee, commission, finders fee or any other valuable consideration from another, solicits, negotiates or attempts to solicit or negotiate the listing, sale, purchase, exchange, lease or option to buy, sell, rent or exchange for any real estate or of the improvements on the real estate or any time-share interval as defined in the Tennessee Time-Share Act, compiled in title 66, chapter 32, part 1, collects rents or attempts to collect rents, auctions or offers to auction or who advertises or holds out as engaged in any of the foregoing. See Tennessee Code 62-13-102
- Commercial real estate: means any real estate other than:
(i) Real estate containing one (1) to four (4) residential units. See Tennessee Code 62-13-501
- Contract: A legal written agreement that becomes binding when signed.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Notice: means a notice specifically referencing an agreement entered into after October 1, 1997, to pay commissions in any brokerage contract or lease or memorandum of the foregoing, sworn to and executed by the broker, identifying the subject real estate by lot and block number or by a metes and bounds description and in the form of notice set out in this subdivision (3) and containing only the information provided for in the form, recorded as provided for in §. See Tennessee Code 62-13-501
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Owner: means the person or persons to whom the fee interest of real estate is titled and does not include a lessee or renter. See Tennessee Code 62-13-501
- Party: means any person or persons seeking to obtain or divest an interest in real estate or a business opportunity as a buyer, seller, landlord, tenant, option grantee or option grantor. See Tennessee Code 62-13-102
- Person: means and includes individuals, corporations, partnerships or associations, foreign and domestic. See Tennessee Code 62-13-102
- Property: includes both personal and real property. See Tennessee Code 1-3-105
- Real estate: means and includes leaseholds, as well as any other interest or estate in land, whether corporeal, incorporeal, freehold or nonfreehold, situated in this state. See Tennessee Code 62-13-501
- Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
- Subsequent owner: means a transferee or purchaser of commercial real estate from the owner or from a previous subsequent owner, but will not include the transferee or purchaser of commercial real estate pursuant to a sale conducted pursuant to title 67, chapter 5, part 25. See Tennessee Code 62-13-501
- written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
- Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) Nothing in this part shall be construed to change any agreement between an owner and a subsequent owner or to release an owner from any liability to a broker for the fees or commissions or to restrict or prevent a third-party claim by a subsequent owner against an owner or a previous subsequent owner for indemnification against a claim made by a broker against a subsequent owner based on a liability of the owner or a previous subsequent owner to the broker.
(c) A broker may enforce an obligation under this section against a subsequent owner by filing suit in a court having appropriate jurisdiction within the latter of the following but in no event more than ten (10) years after the recording of the notice:
(1) One (1) year after the transfer of ownership from the owner or a previous subsequent owner to a subsequent owner; or
(2) One (1) year after the claim for a fee or commission accrues.
(d) A notice containing only the information provided in § 62-13-501 may be recorded pursuant to this part in the office of the register of deeds in the county where the property is located, and the register of deeds shall accept the notice for recording. After the notice is recorded, the person who tendered it for recording shall promptly deliver a copy to the owner of the subject commercial real estate. Delivery may be by personal delivery, certified mail or any delivery service that provides proof of delivery.
(e) Any notice that may be recorded pursuant to this part shall be deemed to be authenticated and eligible for recordation only if the notice conforms to the requirements of § 62-13-501. The register of deeds will index this recorded notice under the name of the owner identified in the notice and shall index the recorded notice in the reverse index under the name of the broker who is a party to the document.
(f) Upon a written request by the owner or subsequent owner of the subject commercial real estate, made after all fee or commission rights, with respect to which a notice has been recorded under this part, have been paid in full or have otherwise been discharged, expired or otherwise are no longer enforceable under applicable law, the broker who recorded the notice or that broker’s successor in interest shall record a release of that notice with the register of deeds for the county where that notice was recorded.
(g) This part shall not be construed to create a lien on any commercial real estate to which this part applies.