To collect a commission for selling real estate, the statute of frauds requires the agreement to be in writing and signed by the party to be charged. This means that any seller who has not signed the listing would not be liable to pay a commission.
But what if one seller represents that he or she has the authority to bind all other sellers? For one seller to be able to sign for another, he or she would need written authority under the “equal dignities rule” – my authority to you to sign for me must be in writing signed by me.
In Jacobs v. Locatelli, Court of Appeal, H042292, Sixth Appellate District, filed Feb. 8, 2017, there were six owners, one of whom was the trustee of his revocable living trust. The listing agent dealt with the trustee who represented that he had the authority to sign for all the owners. All six owners were listed on the listing agreement but only the trustee signed. Importantly, he signed as trustee for his living trust and included the phrase “et al.” indicating that he was signing for others as well.
When the listing agreement ultimately was not honored, the listing agent sued. The lower court granted the five non-signing owners’ demurrer. They had not signed the listing contract and the listing agent, although alleging that the trustee had a written agreement, did not have any writing giving signing authority to the trustee.
In its review, the appellate court noted that the California Supreme Court has held that the statute of frauds should not be used as a shield against contracts otherwise fairly and admittedly made. Here the listing agent alleged she was told by the trustee that he had a written agreement authorizing him to sign for all other sellers. She should be able to use “discovery” and have the court hear her evidence of a written agreement in which the five other owners authorize the trustee to deal with the listing agent and sign the listing agreement for them.
While the listing agent survived the demurrer, and gets a chance to have her day in court, the bottom line of the case is really the bottom line of the listing agreement: to assure your commission rights – all owners must sign the listing agreement. If one owner claims authority to bind the other owners, that must be in writing signed by the other owners and you should get a copy.