Finally, a Win for Brokers; California Court of Appeal Recognizes a Limitation to the Statute of Frauds

March 28, 2017Article

California courts generally apply the statute of frauds quite harshly to real estate brokers. The statute of frauds requires brokerage agreements to be signed by the party to be charged.   However, a recent appellate court decision demonstrates that owners cannot always use the statute to evade legitimate obligations that are reflected by a writing.

In Jacobs v. Locatelli, the broker, Jacobs, entered into a “Vacant Land Listing Agreement” to sell a Marin County property.  The agreement provided a commission of $200,000 if she sold the $2,200,000 property.  However, only one of the property’s twelve owners, Locatelli, signed the agreement.  Five other signature lines were left blank.  Jacobs claimed Locatelli told her that he had authority to sign for the other owners.

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