On October 24, 2017, Dayston LLC agreed to sell Jonathan Brooke acreage and improvements in Erath County, Texas. The Contract provided for two street addresses of the target assets in Stephenville, Texas, and then identified six parcels by abstract number, indicating a total of approximately 81.50 acres.
Appended to the property description was the following: “*Please note the 81.50 acre parcel is being surveyed and renamed. Title company will convey the new legal address once completed.”
Brooke asserted that the contract was void under the Texas statute of frauds because the property descriptions were legally insufficient. Dayston countered that Brooke had personally inspected the land on multiple occasions and additionally, the incorporation of a future survey would satisfy all statute of frauds issues.
The trial court granted Brooke’s request and entered Judgment, finding that the land description was inadequate thus rendering the contract void. All monies held in escrow were ordered returned to Brooke.
Citing Texas Supreme Court authority, the Appellate Court started the analysis by stating that “. . . the knowledge and intent of the parties has no effect on the validity of the contract.” The Appellate Court allowed that the contract must furnish, either within itself or by reference to other identified writings then in existence, the means or data by which property may be identified with certainty.
Documents and surveys to be furnished in the future cannot be used to satisfy the statute of frauds; those writings must be in existence when the contract is signed. If those writings do not sufficiently describe the property to be conveyed, then the contract violates the statute of frauds and is voidable.
Although the writing does not have to contain metes and bounds field notes, it must furnish data that identifies the property with reasonable certainty.
A street address, with nothing more, may be insufficient if there is uncertainty regarding the amount of land included in the conveyance. And, essential elements of the writing may not be proved with extrinsic testimony.
In this case, the Appellate Court examined the legal description of two street addresses, +/- 81.50 acres of A0681 Smith Hancock and A0057 DW Babcock, all in Erath County, Texas, and decided it fails for lack of clarity. As an interesting side note, it appears that if Dayston had added a note that the parcels were all the lands owned by Dayston in Erath County or similar, the Court might have reached a different result.
Brooke wins; Dayston loses; the contract does not satisfy the statute of frauds test. See Dayston, LLC v. Jonathan D. Brooke: Case No. 11-18-00288-CV; 11th District of Appeals of Texas, Eastland; October 8, 2020: https://scholar.google.com/scholar_case?case=6551208105501169766&q=dayston,+llc+v.+brooke&hl=en&as_sdt=6,44&as_vis=1.
Lessons / Questions
How many times have you used or seen incomplete property descriptions in
real estate contracts; how often have you seen or used a provision like “to
be provided in a Survey” or similar?
Will you now change your practice to include a statement in each contract
to the effect that the target asset is the only parcel of real estate
owned by Seller in _________ County?
For those States that have real estate commissions that promulgate
contract forms, do you suppose that the forms will be revised to better
guide brokers, agents, attorneys, buyers, and sellers to properly insert
full property descriptions (maybe by stating that the failure to do so can
invalidate the contract)?
- HNY. Happy New Year 2021 to all my loyal readers!
Stuart A. Lautin, Esq.*
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.