Are You Working with the Right People?

May 5, 2013,

Real estate agreements are are like any other contract. However, it is one of the few types of contracts that are required to be in writing. Because of this, any oral agreements or modifications that have anything to do with real estate can be very difficult to enforce.

Take for example, the California case of Tamimi v. Bettencourt. Fred Tamimi (Tamimi) was a real estate broker who had obtained listings of Mrs. Bettencourt's property on several occasions prior to obtaining an exclusive listing. The exclusive listing provided that if the property were sold by the owners themselves or through any other agent during the listing period, Tamimi would be entitled to a commission of six percent. During the exclusive listing period, Mrs. Bettencourt and her husband sold the property but did not give Tamimi his six percent commission. Tamimi brought this suit to recover his commission.

The central issue to the case is whether or not the fact the husband did not sign off in this agreement should effect the validity of the agreement. The property that was sold was community property, meaning it belonged to both the husband and the wife. Tamimi tried to claim, essentially, that the husband was liable for his wife's debts by nature of being married, therefore he should be equally responsible regarding the payment of the commission. The court disagreed with claim, because under California law, an oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing. Because contracts regarding real estate must be in writing, the husband cannot be held liable for the agreement without his signature on the agreement.

Mr. and Mrs. Bettencourt argue that since the property could not be sold without the husband's signature it must follow that the listing is also unenforceable without his signature. The court, however, disagreed. The agreement at the heart of this case is strictly regarding commission. The sale of the property itself was handled by both of the defendants. It is assumed that the sale was completed properly and is not at issue in this case. Therefore, while the exclusive listing agreement is treated as a real estate agreement in that it must be in writing, it is not treated to all the same strict requirements of real estate contracts. A stand alone commission contract does not need to be signed by all owners of the property, but only those who sign it must abide by it. In this case it means at Mr. Bettencourt is not liable but Mrs. is responsible for paying the entire six percent commission fee to Tamimi.

Utilizing an attorney either for contract negotiations or to help as a final review can help you see issues you may have missed. This could help you save time and energy later. If you have a real estate or contractual issue in the Sacramento area, please contact our office.

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