In September 2010 Buffy Lawrence and Reyna Realty executed a listing agreement. The listing agreement engaged Reyna for three months to market and sell her property, in exchange for a 5% commission, to be shared with a cooperating broker if one was used in the deal by the buyer.
Although the listing term ended
December 31, 2010, Reyna Realty’s broker continued to list the property, post
signage and generally market the property after it expired. Buffy never
objected to these continuing services and efforts.
Reyna Realty received an offer to
purchase the property and assisted Buffy by negotiating a higher purchase
price. The deal was poised to close in March 2011, and the Seller’s Statement
provided for a commission payment to Reyna. Buffy, however, instructed the
title agent to reduce the commission amount by 30%. Reyna rejected this
proposal, so Buffy withdrew her offer and refused to pay Reyna anything.
The purchase and sale funded, and in
October 2011 Reyna Realty sued Buffy Lawrence to recover a real estate
commission. Reyna Realty attached the Purchase and Sale Contract to Reyna’s
lawsuit pleadings, which Contract contained a statement to the effect that “all
obligations of the payment of brokers’ fees are contained in separate written
It was Reyna’s position that
although the stated listing term had indeed expired three months before the
sale date, both the Contract and Settlement Statement contained written
evidence of an extension of the listing at least through the date of sale.
Buffy defended Reyna’s claim by
using a statute of frauds defense. Basically, that defense means that all
commission obligations in the State of Texas must be in writing, signed by the
party obligated to pay it, and no oral or unwritten modifications are typically
The trial court awarded Reyna its
commission of $14,440, plus $36,000 in attorney’s fees. Buffy appealed.
The Appellate Court, looking at the
initial Listing Agreement, Purchase and Sale Agreement and Settlement
Statement, concluded that the documents constituted a written extension
agreement and defeated a statute of frauds defense. Similarly, even though the
Seller’s Statement that was eventually signed provided no compensation to Reyna
Realty, it still indicated that Reyna Realty was serving as the broker for the
And further, Buffy had willingly
accepted the benefits of the services offered by Reyna Realty, which services
were beneficial to Buffy.
From there it was an easy leap to legal
conclusions of “ratification” and “non-repudiation.”
Judgment for Reyna Realty was
affirmed. Reyna wins; Buffy Lawrence loses. See Lawrence v. The Reyna Realty Group; Cause No. 01-13-00819-CV;
Court of Appeals of Texas, First District, Houston Division; May 15, 2014.
Realty forgot to get its listing agreement extended, or maybe Reyna made the
request but Buffy Lawrence was unwilling to sign it. Either way, if the listing
agreement had been properly extended then one might assume that a lawsuit would
not have been necessary and Reyna would have been paid in full at closing.
this case was ultimately won by the broker, a slight variation in facts would
yield a different result. If the broker’s name was not included in the Purchase
and Sale Agreement, then I suspect Buffy would have prevailed.
not assume that just because you continue working for a principal’s benefit
after the expiration of your contract that you will get paid if your efforts
result in a closing. Get it in writing, *before*
expiration of your agreement.
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.