RPN&PJK:jld&bjk:md
2009 - 2010 LEGISLATURE
March 9, 2010 - Introduced by Representatives Richards, Hubler, Turner,
Molepske Jr., Van Roy, Townsend, Smith, Gunderson, Petersen and
Soletski, cosponsored by Senators Sullivan, Taylor, Plale, Jauch, Cowles
and Darling. Referred to Committee on State Affairs and Homeland Security.
AB821,1,8
1An Act to repeal 779.32 (3) (c);
to amend 779.32 (2) (b), 779.32 (2) (c), 779.32
2(3) (intro.), 779.32 (4) (a) (intro.), 779.32 (4) (a) 1., 779.32 (4) (a) 2. a. and b.,
3779.32 (4) (b) (intro.), 779.32 (4) (b) 4., 779.32 (4) (c), 779.32 (4) (d), 779.32 (4m),
4779.32 (8) (a) 1., 779.32 (8) (a) 2., 779.32 (8) (c) 2., 840.11 (1) and 840.11 (2);
to
5repeal and recreate 779.32 (8) (b) and 779.32 (9); and
to create 706.085,
6779.32 (1) (d), 779.32 (2m), 779.32 (8) (am), 779.32 (10) and 779.32 (11) of the
7statutes;
relating to: commercial real estate liens and recording a correction
8instrument and a lis pendens.
Analysis by the Legislative Reference Bureau
Correction instruments
Current law provides a procedure whereby a court may, on satisfactory proof,
make an order correcting the description of real property in a recorded instrument
conveying the property. Current law also provides that correction instruments may
be recorded to make certain specified corrections to recorded plats or certified survey
maps. Although correcting an error in a previously recorded instrument conveying
real property by recording an affidavit making the correction but without court
action has been a common practice for many years, the Wisconsin Court of Appeals
determined in Smiljanic v. Niedermeyer, 2007 WI App 182, 737 N.W.2d 436, that
there is no statutory authority under current law for this method of correction.
This bill provides that an instrument (correction instrument) correcting
previously recorded instruments conveying real property may be executed,
generally, by a person with personal knowledge of the facts stated in the instrument
and recorded in the office of the register of deeds of the county in which the previously
recorded instrument is recorded. A correction instrument may correct a legal
description; add to, correct, or clarify other information, such as names, dates, and
marital status; add an acknowledgment or authentication; or add the consent or
subordination of a mortgagee. The bill specifies what information a correction
instrument must include and provides that the record of the correction instrument
is prima facie evidence of the facts stated in the correction instrument; is presumed
to be true, subject to rebuttal; and constitutes record notice affecting the property's
chain of title to any purchaser of the property. The bill also validates correction
instruments that were recorded before the effective date of the bill.
Lis pendens
Current law provides that any person who applies to a court or municipal
governing body for laying out, widening, vacating, or extending a street, alley, or
other specified public place must file a notice of pendency of the application and that
failure to comply renders all proceedings based on the application void. The bill
instead requires the person making the application to submit a lis pendens to the
register of deeds for filing or recording and removes the provision that failure to
comply renders all proceedings based on the application void.
Current law provides that any final order or resolution based on the application
has no effect and is not notice unless a certified copy of the order or resolution
contains a full and accurate description of the property and is recorded in the office
of the register of deeds. The bill provides that the final order must instead contain
a legal description of the property and is not notice unless it is recorded in the office
of the register of deeds. The bill also removes a provision in current law that a
resolution or order that affects land but for which no application was made has no
effect and is not notice unless it is recorded.
Commercial real estate liens
This bill makes numerous changes in the process of obtaining and terminating
a commercial real estate lien, which is a lien on real property other than real property
that contains eight or fewer dwelling units, that is zoned for residential use but that
has no structures, or that is zoned for agriculture.
Currently, if a real estate broker (broker) earns a commission on the sale of
commercial real estate, the broker has a lien against the commercial real estate for
the unpaid amount of the commission. The bill expands the types of agreements that
may give rise to a commercial real estate lien to include an agreement between a
broker and a person that grants the broker the right to represent the person in the
lease of commercial real estate.
Under current law, to claim a lien against commercial real estate for an unpaid
commission, a broker must file or record a written notice of intent to claim the lien
at the office of the register of deeds for the county in which the commercial real estate
is located and deliver a copy of that notice to the person owing the commission. Under
this bill, to obtain a lien, the broker must send written notice to the person who owes
the commission of the right to claim the lien and record a written notice of interest
in the commercial real estate at the office of the register of deeds for the county in
which the commercial real estate is located.
Currently, the lien is perfected when a broker files a notice of lien in the office
of the register of deeds for the county in which the commercial real estate is located.
Under the bill, the lien is perfected when a broker records the lien in the office of the
register of deeds for the county in which the commercial real estate is located.
The bill changes the time period for perfecting a lien involving a written
commercial real estate list contract or buyer agency agreement from three days
before the conveyance documents are recorded with register of deeds to 30 days after
the conveyance documents are recorded with register of deeds.
Under current law, the broker is required to satisfy a commercial real estate
lien if the person owing a commission that is the subject of the lien pays an amount
equal to 125 percent of the commission owed into the trust account of the broker or
of an attorney who does not represent any party to the dispute, pending resolution
of the dispute. This bill adds a mutually agreed third party to those who can receive
and hold the money pending resolution of the dispute.
Current law provides that a commercial real estate lien is extinguished if an
action to enforce the lien is not commenced within two years after the lien is
perfected. Under this bill, a commercial real estate lien is extinguished if a new
notice of interest in the commercial real estate is not recorded in the office of the
register of deeds for the county in which the commercial real estate is located within
two years after the original notice of interest was recorded. Under the bill, a broker
may rescind a notice of interest by recording a notice in the office of the register of
deeds for the county in which the commercial real estate is located indicating that
he or she no longer claims an interest in the commercial real estate.
The bill requires a broker to record a notice rescinding a notice of interest in the
commercial real estate if the agreement that created the interest in the commercial
real estate is terminated or expires. In addition, under the bill, a broker may waive
the lien by signing a written waiver, but no action between any other persons may
invalidate the lien, other than the payment in full of the broker's commission.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB821, s. 1
1Section
1. 706.085 of the statutes is created to read:
AB821,3,5
2706.085 Correction instruments. (1) Entitled to be recorded; purposes. 3An instrument correcting a previously recorded conveyance shall be entitled to
4record in accordance with s. 706.05 in the office of the register of deeds of the county
5in which the conveyance is recorded and shall include one or more of the following:
AB821,4,5
1(a) The correction of a legal description, including a distance; angle; direction;
2bearing; chord; lot, block, unit, or building number or letter; appurtenant easement;
3section number; township name or number; municipality, county, or state name;
4range number or meridian; certified survey map number; or subdivision or
5condominium name.
AB821,4,76
(b) The addition, correction, or clarification of information other than a legal
7description, including any of the following information:
AB821,4,108
1. A party's name, including the spelling of the name; a first or middle name
9or initial; a name suffix, such as senior or junior; alternate names by which the party
10is known; or a description of an entity as a corporation, company, or similar identifier.
AB821,4,1111
2. A party's marital status.
AB821,4,1212
3. The date on which the conveyance was executed.
AB821,4,1313
4. Whether the property is a homestead.
AB821,4,1414
5. The tax parcel number.
AB821,4,1515
6. The identity of the drafter.
AB821,4,1616
7. The recording data for an instrument referenced in the conveyance.
AB821,4,1717
8. The nature and purpose of the conveyance.
AB821,4,1818
9. The title of the conveyance.
AB821,4,1919
10. Facts relating to the acknowledgment or authentication.
AB821,4,2020
(c) The addition of an acknowledgment or authentication.
AB821,4,2221
(d) The disclaimer by a grantee under a deed of that party's interest in the real
22property that is the subject of the deed.
AB821,4,2323
(e) The addition of a mortgagee's consent or subordination.
AB821,5,2
24(2) Execution requirements. (a) A correction instrument shall be
25acknowledged or authenticated in accordance with s. 706.06 or 706.07. It shall recite
1the document number of the conveyance, the names of the grantor and grantee, and,
2if given on the conveyance, the volume and page numbers.
AB821,5,133
(b) 1. Except as otherwise provided in this paragraph, a correction instrument
4that is executed after the effective date of this subdivision .... [LRB inserts date], may
5be executed by a person having personal knowledge of the circumstances of the
6conveyance and of the facts recited in the correction instrument, including the
7grantor, the grantee, the person who drafted the conveyance that is the subject of the
8correction instrument, or the person who acted as the settlement agent in the
9transaction that is the subject of the conveyance, and shall recite the basis for the
10person's personal knowledge. A correction instrument that was executed before the
11effective date of this subdivision .... [LRB inserts date], is not rendered ineffective by
12reason of the instrument's failure to recite that the maker had the knowledge or
13capacity required under this subdivision.
AB821,5,1514
2. A correction instrument that makes the correction under sub. (1) (e) shall be
15signed by the consenting party, or an heir, successor, or assignee of the party.
AB821,5,1716
3. A correction instrument that adds, removes, or replaces a divisible parcel in
17a conveyance shall be signed by the following persons:
AB821,5,1918
a. If the correction instrument supplies a lot, block, unit, or building number
19or letter that was omitted from a conveyance, by any party identified in subd. 1.
AB821,5,2120
b. If a parcel is being added to a conveyance that also correctly conveys other
21land, only by the grantor.
AB821,5,2322
c. If a parcel is being removed from a conveyance that also correctly conveys
23other land, only by the grantee.
AB821,6,3
1d. If a lot or unit number or letter is being corrected and the lot or unit
2incorrectly recited in the conveyance is also owned by the grantor, only by the
3grantee.
AB821,6,64
e. If a lot, block, unit, or building number or letter is being corrected and the
5lot or unit incorrectly recited in the conveyance is not also owned by the grantor, by
6any party identified in subd. 1.
AB821,6,97
(c) A person who executes and records a correction instrument shall send notice
8of that fact by 1st class mail to all parties to the transaction that was the subject of
9the conveyance at their last-known addresses.
AB821,6,11
10(3) Effect of record. All of the following apply to the record of a correction
11instrument that complies with this section, or a certified copy of the record:
AB821,6,1412
(a) It is prima facie evidence of the facts stated in the instrument; is presumed
13to be true, subject to rebuttal; and constitutes notice to a purchaser under s. 706.09
14of the facts recited in the instrument.
AB821,6,1615
(b) It may be asserted by a purchaser for a valuable consideration against any
16person making an adverse or inconsistent claim under s. 706.09 (1) (i).
AB821,6,21
17(4) Previously recorded instruments are valid. Any instrument recorded
18before the effective date of this subsection .... [LRB inserts date], that purports to
19correct a previously recorded conveyance and that would have been a valid correction
20instrument under this section had this section been in effect when the instrument
21was recorded is hereby validated.
AB821, s. 2
22Section
2. 779.32 (1) (d) of the statutes is created to read:
AB821,6,2523
779.32
(1) (d) "Tenant representation agreement" means an agency agreement
24between a broker and a person that grants the broker the right to represent the
25person in the lease of commercial real estate.
AB821, s. 3
1Section
3. 779.32 (2) (b) of the statutes is amended to read:
AB821,7,62
779.32
(2) (b) If the broker has earned a commission under a written
3commercial real estate buyer agency agreement
or tenant representation
4agreement, the broker has a lien for the unpaid amount of the commission against
5the commercial real estate, or the interest in commercial real estate, that is acquired
6as a result of the agreement.
AB821, s. 4
7Section
4. 779.32 (2) (c) of the statutes is amended to read:
AB821,7,128
779.32
(2) (c) If the broker has earned compensation
from the owner or landlord 9under a written agreement for the lease or management of commercial real estate
10or under a tenant representation agreement, the broker has a lien for the unpaid
11amount of the compensation against the commercial real estate for which the leasing
12or management services were provided under the agreement.
AB821, s. 5
13Section
5. 779.32 (2m) of the statutes is created to read:
AB821,7,2014
779.32
(2m) Notice of
lien rights. (a) To claim a lien under sub. (2), the broker
15shall notify the person who owes the commission or compensation described in sub.
16(2) (a), (b), or (c) in writing of the right to claim a lien under this section. A broker
17shall include the notice required under this subsection in the commercial real estate
18listing contract, commercial real estate buyer agreement, tenant representation
19agreement, or written agreement for the lease or management of commercial real
20estate.
AB821,7,2221
(b) The notice required under this subsection shall be in substantially the
22following form:
AB821,8,223
NOTICE: A broker has the authority under section 779.32 of the Wisconsin
24Statutes to file a broker lien for commissions or compensation earned but not paid
1when due against the commercial real estate, or the interest in the commercial real
2estate, that is the subject of this agreement.
AB821, s. 6
3Section
6. 779.32 (3) (intro.) of the statutes is amended to read:
AB821,8,164
779.32
(3) Notice of
intent to claim lien interest. (intro.)
A broker has In
5addition to the requirements of sub. (2m), to claim a lien under sub. (2) (a) or (b)
only
6if, the broker
files or records
shall record a written notice of
intent to claim a lien 7interest under this section at the office of the register of deeds for the county in which
8the commercial real estate is located
and delivers a copy of the notice to the person
9owing the commission under sub. (2) (a) or (b). A broker has a lien under sub. (2) (c)
10only if the broker provides a written notice of intent to claim a lien under this section
11to the person owing the compensation under sub. (2) (c). All notices
. A notice 12required under this subsection shall contain the name of each party to the agreement
13under which the
lien interest is claimed, the date that the agreement was entered
14into and a brief description of the commercial real estate
on which the lien is intended
15to be claimed. All notices that is subject to the lien rights. A notice required under
16this subsection shall be provided within the following time periods:
AB821, s. 7
17Section
7. 779.32 (3) (c) of the statutes is repealed.
AB821, s. 8
18Section
8. 779.32 (4) (a) (intro.) of the statutes is amended to read:
AB821,8,2219
779.32
(4) (a) (intro.) A lien under this section is perfected when a broker
files 20records a
notice of lien in the office of the register of deeds for the county in which
21the commercial real estate is located. The lien must be perfected no later than the
22following:
AB821, s. 9
23Section
9. 779.32 (4) (a) 1. of the statutes is amended to read:
AB821,9,224
779.32
(4) (a) 1. In the case of a lien under sub. (2) (a) or (b),
3 days prior to 30
25days after the date that the conveyance documents are recorded with the register of
1deeds in the county where the real property, that is the subject of the listing contract
2or buyer agency
contract agreement, is located.
AB821, s. 10
3Section
10. 779.32 (4) (a) 2. a. and b. of the statutes are amended to read:
AB821,9,84
779.32
(4) (a) 2. a. The date that the broker earns a commission or
5compensation that gives rise to a lien under this section. For purposes of this subd.
62. a., a commission or compensation is considered earned on the date that payment
7of it is due under the lease
, tenant representation agreement, or management
8agreement.
AB821,9,139
b. The date that the broker receives notice that he or she has earned a
10commission or compensation that gives rise to a lien under this section. For purposes
11of this subd. 2. b., a commission or compensation is considered earned on the date
12that the payment of it is due under the lease
, tenant representation agreement, or
13management agreement.
AB821, s. 11
14Section
11. 779.32 (4) (b) (intro.) of the statutes is amended to read:
AB821,9,1615
779.32
(4) (b) (intro.) The
notice of lien shall be signed by the broker and shall
16include all of the following information:
AB821, s. 12
17Section
12. 779.32 (4) (b) 4. of the statutes is amended to read:
AB821,9,1918
779.32
(4) (b) 4. The amount of the lien at the time the
notice lien is
filed 19recorded.
AB821, s. 13
20Section
13. 779.32 (4) (c) of the statutes is amended to read: