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Commercial Leases

How do Landlord Liens Work for Commercial Properties?

Any person leasing or renting all or part of a building for nonresidential use has a preference lien on all property of the tenant or subtenant in the building to secure the payment of rent due and to become due. As to rents to become due, the lien is for rent that is to become due during the current 12-month period succeeding the date of the rental agreement or an anniversary of that date. If a UCC financing statement has been filed during the previous contract year, a secured party’s perfected security interest is superior to the landlord’s lien.

If rent for commercial property becomes more than six months past due, the lien is unenforceable unless the landlord complies with certain  filing requirements. A verified lien statement must be filed with the county clerk of the county where the property is located, stating the amount due, itemizing the months for which rent is claimed, stating the name and address of the tenant or subtenant, if any, and describing the rented premises. In addition, the statement must show the date on which the lease contract began and the date on which it will terminate.

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