Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Monday, April 30, 2012

Payment of commission in real estate transaction governed by statute of frauds in RELA

REAL Estate License Act requires commission agreement to be in writing and to contain specific items of essential information.
Written agreement compliant with statute of frauds provision of the Real Estate License Act (RELA) required for payment of commission for sale/purchase of real estate to be enforceable.
The statute of frauds provision of RELA provides,
A person may not maintain an action in this state to recover a commission for the sale or purchase of real estate unless the promise or agreement on which the action is based, or a memorandum, is in writing and signed by the party against whom the action is brought or by a person authorized by that party to sign the document.

Tex. Occ. Code Ann. § 1101.806(c) (West 2012).
To comply with this section, an agreement or memorandum must: (1) be in writing and must be signed by the person to be charged with the commission; (2) promise that a definite commission will be paid, or must refer to a written commission schedule; (3) state the name of the broker to whom the commission is to be paid; and (4) either itself or by reference to some other existing writing, identify with reasonable certainty the land to be conveyed. Lathem v. Kruse, 290 S.W.3d 922, 925 (Tex. App.-Dallas 2009, no pet.). Strict compliance with RELA is required; the agreement to pay a real estate commission must be in writing or it is not enforceable. Id. The essential elements of the agreement may not be supplied by parol evidence. Boyert v. Tauber, 834 S.W.2d 60, 62 (Tex. 1992).
SOURCE: DALLAS COURT OF APPEALS - 05-10-00675-CV – 4/26/12
None of the documents on which appellees rely contains a promise to pay a real estate commission or identifies appellees as brokers to whom a commission will be paid. Accordingly, there is no evidence of a written agreement complying with the statute of frauds provision of RELA. See Tex. Occ. Code Ann. § 1101.806(c); Lathem, 290 S.W.3d 925. We sustain Litton's third issue. Having sustained Litton's third issue, we need not consider its other issues. Tex. R. App. P. 47.1.