Court of Appeals Upholds Broker’s Right to Pursue Commission Claim
By: Eva Cantarella
Sometimes you’ve got to fight like heck to receive your hard-earned real estate commission. A recent Michigan Court of Appeals decision vividly illustrates this point. Great Day Real Est., LLC v. Asjj Hotel Mgmt., 2026 Mich. App. LEXIS 2160 (March 13, 2026). Here’s what happened.
On May 23, 2018, Great Day Real Estate, LLC (“Great Day”) entered into an agreement with ASJJ Hotel Management (“ASJJ Management”) in which ASJJ Management agreed that, if Great Day found a buyer for the Silver Beach Hotel (“the hotel property”), the “seller” would then pay Great Day a finder’s fee equal to 2% of the selling price. Ramzi Fakhouri—the owner of ASJJ Management—signed the agreement on behalf of ASJJ Management. The agreement did not identify the owner of the hotel property, but the record owner at the time was ASJJ Properties (not ASJJ Management), a separate legal entity also owned by Fakhouri.
Great Day subsequently found a prospective buyer for the hotel property–Riverview Hospitality LLC–which then entered into a land contract to purchase the hotel property. The land contract referred to ASJJ Management and ASJJ Properties collectively as “Seller,” and represented that “Seller has title to the Property, free and clear of any judgments, liens, or other encumbrances.” On December 2, 2020, a “memorandum of land contract” for the hotel property was recorded with the Berrien County Register of Deeds. It identified the “seller” as ASJJ Properties and the buyer as Riverview.
By late December 2020, however, Great Day had not received its finder’s fee, so it claimed a commercial real estate broker’s lien on the hotel property under the Michigan Commercial Real Estate Broker’s Lien Act (“CREBLA”). The lien was recorded by the Berrien County Register of Deeds on December 23, 2020, and it identified the owner of the property as ASJJ Management (not ASJJ Properties who was the “record” owner).
On January 28, 2021, Great Day filed a complaint against ASJJ Properties and Riverview seeking to foreclose on its lien. Great Day attached to its complaint a lien naming ASJJ Properties as the owner of the hotel property–not the lien it recorded with the Berrien County Register of Deeds which named ASJJ Management as the owner of the hotel property.
No one initially caught this discrepancy. However, on December 29, 2023, ASJJ Management’s attorney discovered the discrepancy between the lien attached to the complaint and the lien recorded in the Berrien County Register of Deeds. ASJJ Management asked the Court to dismiss Great Day’s complaint because the recorded lien was against ASJJ Properties, not ASJJ Management. ASJJ also asserted that the recorded lien was “invalid,” contending that the CREBLA specifies that a commercial real estate broker’s lien must name the “record” owner of the property and there was no dispute that ASJJ Management was the “record” owner, not ASJJ Properties.
In response, Great Day explained that its representative had actually attempted to file two liens on the hotel property—one naming ASJJ Management as the owner, the other naming ASJJ Properties as the owner. But the Berrien County Register of Deeds mistook the liens as duplicates, so it recorded one and sent the other back to Great Day stamped as a “NON-OFFICIAL COPY.”
Great Day asked the court to allow it to amend its complaint to add the lien actually filed with the Register of Deeds, arguing that the lien was valid because (i) under the CREBLA, a commercial real estate broker’s lien need only name the owner of the commercial real estate, and (ii) there was a question of fact as to whether ASJJ Management was an equitable owner of the hotel property, regardless of whether it was the owner of record.
The trial court nonetheless faulted Great Day for not exercising due diligence to ensure that it attached to its complaint a lien that was actually recorded with the Register of Deeds, for not discovering the defect in its complaint at any point thereafter, and for apparently never realizing that it was attempting to foreclose on a lien on real property without naming the entity that held record title to the property–ASJJ Properties, not ASJJ Management.
The trial court emphasized that ASJJ Properties alone was the record owner of the hotel property but the lien naming ASJJ Properties was never recorded. Only the lien naming ASJJ Management, who was not the record owner, was recorded. Accordingly, the trial court struck the broker’s lien, and dismissed the complaint. Great Day appealed.
The Michigan Court of Appeals explained that the CREBLA was enacted to protect the right of commercial real estate brokers to collect their contractually negotiated commissions. Therefore, it allows a commercial real estate broker who is owed a commission for its services to record a claim of lien against the property sold or leased, and to bring an action to foreclose that lien. However, the lien must include “the name of the owner of the commercial real estate”; otherwise, it is void and unenforceable.
The trial court had interpreted this naming requirement to mean the lien had to name the “recorded” owner of the property. The Court of Appeals disagreed and explained that (i) the CREBLA uses both “the owner of commercial real estate” and “the owner of record” multiple times, and (ii) in its list of items that must be included in the lien, it requires only the name of the owner, not the name of the “recorded” owner. Therefore, while the trial court correctly found there was no genuine issue of material fact that ASJJ Management was not the “record” owner of the hotel property, it erred by failing to address Great Day’s argument that there was sufficient evidence to show that ASJJ Management (the party named in the lien) was an equitable owner of the hotel property. Accordingly, the Court of Appeals vacated the trial court’s order and remanded the case back to the trial court to make findings on this issue.
The lesson to be learned from this case is to exercise extreme due diligence when preparing and filing a broker’s lien under the CREBLA.
[This article offered by attorney Eva Cantarella who specializes in commercial property tax appeals and property tax exemptions. Ms. Cantarella can be reached at 248-335-5000 or ecantarella@hertzschram.com]
