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Memorandum 
To: Members, Wisconsin State Assembly 
From: Tom Larson, Director of Regulatory and Legislative Affairs 
Date: April 19, 2010 
Re: SB 587 – Changes to Wisconsin’s Commercial Lien Law 
The Wisconsin REALTORS® Association supports SB 587, legislation that seeks to 
make Wisconsin’s Commercial Lien Law more effective by modifying the current process 
for filing a lien. 
Overview -- Wisconsin’s Commercial Lien Law authorizes real estate brokers in a 
commercial real estate transaction to place a lien on a property to insure payment of the 
commission in both purchase/sale transactions and lease transactions. While the 
requirements for filing a lien in purchase/sale transactions have some similarities to the 
lien requirements in lease transactions, they also have some significant differences. 
Purchase and Sale Transactions 
Current Law – In a purchase/sale transaction, a real estate broker is authorized to place 
a lien on property prior to closing to ensure payment of the commission at closing. In 
other words, this law provides real estate brokers with an insurance policy to make sure 
they receive any commission owed at closing. 
To “perfect” the lien (or make the lien legally enforceable) in a purchase/sale transaction, 
the broker must file two separate documents with the register of deeds for the county in 
which the property is located: 
(1) an intent of a possible lien, which must be filed 30 days prior to closing; and 
(2) the actual lien, which must be filed 3 days before closing. 
If the broker fails to file the necessary paperwork and does not get paid at closing, the 
broker can pursue a breach of contract claim. However, if the breach of contract claim is 
against the seller, the seller no longer owns the property and the broker will have to find 
some other means through which to enforce a favorable judgment from a court. 
The Problem -- Wisconsin’s Commercial Lien Law is the only lien law that requires the 
filing of an "intent of a possible lien" 30 days prior to the time payment of a commission 
or other compensation is owed and this requirement has made the law ineffective from a 
practical standpoint because: 

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(a) brokers are required to give notice of intent so early, in some cases before 
they sign the lease listing or management agreement (§ 779.32(3)(c)), and in other 
cases just too far in advance (§ 779.32(3)(a) & (b)). 
(b) commercial brokers generally are unaware that their client will not be paying them 
until right before or at closing; and 
(c) filing such a notice of potential lien could jeopardize the transaction or the 
broker's relationship with the client 
The Solution – To address these problems, Senate Bill 587 makes the following changes 
to the current commercial lien law: 
Ø Replace the “Notice of Intent of a Possible Lien” requirement” with a “Notice of 
Interest” requirement. Like the “Notice of Intent of a Possible Lien,” a “Notice of 
Interest” must be filed with the Register of Deeds at least 30 days in advance of a 
closing. The “Notice of Interest” will be valid for up to 24 months from the date of 
filing. 
Ø To make sure the property owner is aware of the broker’s lien rights, require all 
commercial listing contracts, buyer agency agreements, and tenant 
representation agreements related to commercial real estate to include a 
disclosure statement to inform the consumer that brokers have the authority to 
file a lien if the commission is not paid. 
Ø Finally, authorize the Broker to file a lien at any time up to 30 days after the date 
of closing. 
Current Process vs. New Process – Here is a comparison of the process for filing a 
commercial lien law under current law and the changes proposed by Senate Bill 587: 
Ø Current process 
o Must file notice of intent to file a possible lien with register of deeds at 
least 30 days prior to closing 
o Must file actual lien with register of deeds at least 3 days prior to closing 
o Must send a copy of the lien to the property owner within 72 hours after 
filing 
Ø New process 
o Must provide notice of lien rights in the listing agreement, buyer agency 
agreement, etc. 
o Must provide a notice of interest with the register of deeds at least 30 
days before the deed or other conveyance 
o Must file the lien within 30 days after the closing documents are recorded 
o Must send a copy of the lien to the property owner within 72 hours after 
filing 
Lease and Management Transactions 
Current Law -- In a lease transaction, a real estate broker who is not paid a commission 
that is owed may place a lien on a property AFTER the lease agreement is signed or the 
commission or fee is owed. See Wis. Stat. §§ 779.32(2)(c) and (4)(a)2. This authority to 

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place a lien on the property after a commission is owed is similar to the authority 
provided under Wisconsin’s contractor lien law. 
To perfect the lien in a lease transaction, the broker must file two separate documents 
with the register of deeds for the county in which the property is located: 
(1) notice of intent to file a lien before the date that the lease or management 
agreement is entered into; and 
(2) the actual lien, which must be filed 90 days after the later of the following: 
a. the date the broker earns a commission or compensations, or 
b. the date that the broker receives notice that he/she has earned a 
commission or compensation 
The Problem – Similar to purchase/sale transactions, requiring a broker to file a “notice 
of intent” before the lease is entered into is problematic because this requirement can 
strain a broker’s relationship with a client, suggesting that the broker does not trust the 
client to honor his/her financial obligations under the lease or management agreement. 
The Solution -- To address this problem, Senate Bill 587 makes the following changes to 
the current commercial lien law: 
Ø Replace the “Notice of Intent of a Possible Lien” requirement with a disclosure 
statement in all commercial listing contracts, buyer agency agreements, and 
tenant representation agreements. The disclosure statement will inform the 
consumer that brokers have the authority to file a lien if the commission is not 
paid. 
Current Process vs. New Process -- Here is a comparison of the process for filing a 
commercial lien law under current law and the changes proposed by Senate Bill 587: 
Ø Current process 
o Must file notice of intent to file a possible lien with register of deeds at 
least one day before the lease is entered into. 
o Must file actual lien with register of deeds at least 90 days after 
commission is earned 
o Must send a copy of the lien to the property owner within 72 hours after 
filing 
Ø New process 
o Must provide notice of lien rights in the listing agreement, buyer agency 
agreement, etc. 
o Must file the lien within 90 days after the commission is earned 
o Must send a copy of the lien to the property owner within 72 hours after 
filing 
Summary of Changes – Here is a complete summary of all the changes made to the 
commercial lien law by Senate Bill 587: 
Ø Replaces the “Notice of Intent of a Possible Lien” requirement” with a “Notice of 
Interest” requirement for all purchase/sale transactions. (Note – for 

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lease/management transactions, the “Notice of Intent of a Possible Lien” 
requirement is eliminated.) Like the “Notice of Intent of a Possible Lien,” a 
“Notice of Interest” must be filed with the Register of Deeds at least 30 days in 
advance of a closing. The “Notice of Interest” will be valid for up to 24 months 
from the date of filing. 
Ø To make sure the property owner is aware of the broker’s lien rights, require all 
commercial listing contracts, buyer agency agreements, and tenant 
representation agreements related to commercial real estate to include a 
disclosure statement to inform the consumer that brokers have the authority to 
file a lien if the commission is not paid. 
Ø Authorizes the broker to file a lien at any time up to 30 days after the date of 
closing. (Keeps current law with respect to lease, (tenant representation 
agreements – see below) and other management agreements – 90 days after 
commission is owed) 
Ø Clarifies that commercial lien law applies to “tenant representation agreements.” 
Current law uses the terms” lease” and “management agreement.” 
Ø Removes the requirement to file an intent of possible lien 30 days prior to 
closing. Instead, all commercial listing contracts, buyer agency agreements, 
tenant representation agreements, lease listings and written agreements for 
management of commercial real estate would be required to include a disclosure 
statement to inform the consumer that brokers have the authority to file a lien if 
the commission is not paid. 
Ø Clarifies the lien can be filed to recover commission “or compensation,” which is 
intended to cover fees often owed under buyer agency/ tenant representation 
agreements, lease listings or management agreements. Current law indicates 
that a lien can be filed only to recover a commission. 
Ø Expands the list of entities that can handle escrow related to commission 
disputes to include “mutually-agreed-upon third parties." 
Ø Creates an enforcement provision indicating that commercial lien can be 
enforced through the same process as construction liens (Wis. Stat. sec. 779.09) 
Ø Clarifies that if brokers sign a written lien waiver they waive right to the lien (see 
Wis. Stat. sec. 779.03(1)). 
Ø Allows title insurance companies to correct a variety of recording errors on 
deeds, mortgages, easements, etc., without having to commence a court 
action or gather all of the parties and re-execute the faulty document. 
(Restores law that existed prior to Smiljanic v. Niedermeyer, 2007 WI App 
182, 737 N.W.2d 436.)