Where must the disclosure be included under the Commercial Real Estate Sales Commission Lien Act?

• A. In the deed.
• B. In the closing statement.
• C. In the commercial listing agreement or separate written agreement.
• D. In the mortgage.

Answer: (C)

The key idea is that the act requires the broker’s right to a commission lien to be disclosed where the contract establishes that right. That disclosure belongs in the commercial listing agreement or in a separate written agreement because these documents create and memorialize the compensation arrangement between the broker and the seller. Including it there ensures all parties know about the lien from the outset and that the lien notice is part of the enforceable contract.

Placing the disclosure in the deed isn’t appropriate because the deed deals with transferring ownership, not with how a broker will be paid. The closing statement only itemizes financial settlements after terms are agreed and closed, so it isn’t the proper vehicle to establish or notice a lien. The mortgage concerns financing and does not address the broker’s lien for compensation.

So, the disclosure must be in the listing agreement or in a separate written agreement to provide formal notice and enforceability of the lien.