How Business Brokers Can Protect Their Commissions: Tail Provisions, UCC Liens, and Statutory Enforcement

In the fast-paced world of business brokerage, few things are more frustrating than successfully facilitating a deal—only to be sidelined when it comes time to collect your commission. Whether you're brokering the sale of a small business, coordinating a strategic acquisition, or introducing qualified buyers, your compensation should never be an afterthought.

Yet too often, brokers find themselves chasing unpaid commissions, especially when deals close after a listing agreement expires or when sellers attempt to circumvent payment obligations. Fortunately, Florida law and sound contract drafting offer powerful tools to protect brokers and their earnings.

Here are three key strategies every broker should consider: tail provisions, UCC liens, and statutory recovery rights.

1. Tail Provisions: Safeguarding Post-Term Commissions

A tail provision is a contractual clause that entitles a broker to a commission if the business is sold after the listing agreement ends—but to a buyer the broker introduced or procured during the agreement’s term.

Why Tail Provisions Matter

Without a tail provision, a seller could wait until the agreement expires and then close with a buyer the broker brought to the table—effectively cutting the broker out of the deal. Tail provisions close that loophole by extending commission rights beyond the termination date.

How to Draft an Effective Tail Clause

• Define the tail period: Common durations range from 6 to 12 months.

• Identify protected buyers: Include a list or require the broker to submit one upon termination.

• Clarify trigger events: State that commission is owed if the business is sold, transferred, or otherwise disposed of to a protected buyer—regardless of who closes the deal.

Pro Tip

Tail provisions are especially critical in industries with long sales cycles or where buyers conduct extended due diligence. They also help protect brokers who generate off-market interest that matures after the agreement ends.

2. UCC Liens: Securing Your Commission Like a Creditor

If your listing agreement includes a commission payable upon closing—and you’ve performed the work—you may be able to secure your right to payment using a UCC-1 financing statement. This transforms your commission into a secured interest in the seller’s business assets.

How It Works

• Include security language in your listing agreement (e.g., “Seller grants Broker a security interest in the proceeds of sale…”).

• File a UCC-1 lien with the Florida Secured Transaction Registry.

• If the seller defaults or attempts to transfer assets without paying your commission, you have a legal basis to enforce your lien.

Key Considerations

• UCC liens are most effective when the commission is quantified and undisputed.

• You must file before the assets are transferred or encumbered by other creditors.

• The lien does not guarantee payment—but it strengthens your position dramatically.

Pro Tip

UCC liens are especially useful when the deal involves seller financing, installment payments, or delayed closings. They also send a clear message: the broker is not just a facilitator—they’re a stakeholder.

3. Statutory Recovery Rights: Florida’s Legal Backbone

Florida law provides brokers with statutory remedies for unpaid commissions, particularly when the broker is licensed and the agreement is in writing.

Relevant Statutes

• Fla. Stat. § 475.42: Prohibits interference with a broker’s right to compensation.

• Fla. Stat. § 475.25: Authorizes disciplinary action against parties who violate broker compensation rights.

• Fla. Stat. § 772.11: Allows for civil theft claims when a party knowingly deprives another of property—including earned commissions.

Strategic Use

• If the seller refuses to pay despite a valid agreement, you may pursue claims for:

  • Breach of contract

  • Unjust enrichment

  • Civil theft (with treble damages and attorney’s fees)

• A pre-suit demand letter under § 772.11 can trigger settlement discussions and preserve your right to enhanced damages.

Final Thoughts: Commission Protection Is Deal Protection

Brokers are often the linchpin of successful transactions—navigating valuations, personalities, and negotiations to bring parties together. But without enforceable protections, even the most skilled broker can be left unpaid.

By incorporating tail provisions, securing rights through UCC filings, and leveraging Florida’s statutory remedies, brokers can transform their commission from a hopeful outcome into a legally protected asset.

If you’re a broker drafting a listing agreement or facing a commission dispute, don’t wait until the deal closes to protect your interests. Build your leverage from day one.

Contact Lomba, PA South Florida’s Business Lawyer for more information.