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Real Estate Brokerage Agreements and the Statute of Frauds

Posted on: June 20, 2012

Real estate brokerage agreements should be written and signed by all parties, even though a written agreement is not required by Florida law.  Written agreements enable consistent construction and better protect the rights of the parties.

Generally, contracts may be either written or verbal. Florida, like every jurisdiction in the United States, has laws requiring that certain types of contracts be made in writing.  The purpose in requiring written agreements is to prevent fraud.  Therefore, the laws requiring writing are called “statutes of frauds.”  As the Florida Supreme Court explained in Yates v. Ball, 181 So. 341, 344 (Fla. 1937), “The statute of frauds grew out of a purpose to intercept the frequency and success of actions based on nothing more than loose verbal statements or mere innuendos.”

Florida law requires written agreements for the sale or real property and for the long-term lease of real property.  Florida law does not require real estate brokerage agreements to be written agreements.  Real estate brokerage agreements, including agreements with listing and commission clauses, have the transfer of real property as their likely conclusion.  Further, these agreements tend to control some of the terms for the transfer of real property.  Due to their significance and their relation to agreements that are required to be written, real estate brokerage agreements should be made in writing.

The statute of frauds sets a floor for memorializing the terms of agreements, not a ceiling.  It is generally the better practice to reduce all terms of an agreement to writing, regardless of whether writing is required by the statute of frauds.  Real estate brokerage agreements should be written and signed by all parties, particularly because these agreements can have significant repercussions pertaining to the transfer of the property in question.

If you are about to enter into a real estate brokerage agreement or have an oral real estate brokerage agreement that should be in writing, call one of our South Florida real estate lawyers today at (954) 779-7009.