Under the Massachusetts Statute of Frauds (MGL Chapter 259, Section 1), all of the following types of real estate agreements must be in writing to be enforceable EXCEPT:
Correct Answer
C) A buyer's oral agreement to pay a broker's commission if the broker finds a suitable property
Under the Massachusetts Statute of Frauds (MGL Chapter 259, Section 1), certain agreements must be in writing, including contracts for the sale of land, leases for more than one year, and listing agreements. However, a buyer's oral promise to pay a broker's commission is not automatically required to be in writing under the same Statute of Frauds provisions that govern real estate sales contracts. While it is strongly advisable to have commission agreements in writing, and while the broker may face practical difficulty enforcing an oral commission agreement, the specific Statute of Frauds provision most directly requiring written form applies to contracts for the sale of land — not to every oral commission arrangement. Note: This is a nuanced area; listing agreements in Massachusetts must be in writing under licensing regulations, but a buyer's oral commission promise occupies a different legal category.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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- → A Rhode Island licensee encounters a listing agreement lets the principal broker retain a portion of deposit money upon buyer default. What should the licensee remember?
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