Dallas Bar Association
HEADNOTES
Focus Real Property/Environmental Law
May 2012 Volume 37 Number 5
The Girl With the File-Stamp Habitat for Humanity Build Day Tattoo Arrives in June By Kandice Bridges
Join the cast and crew of Bar None June 6-9 as they present The Girl With the File-Stamp Tattoo. This is the 27th year for the Bar None variety show and it promises to be the best show yet. Watch Dallas area lawyers and judges sing, dance and make you laugh so hard your sides hurt. As much as the cast and crew love making people in the audience cry from laughing so hard, their real motivation is to support the Sarah T. Hughes Diversity Scholarship program. The scholarship program was established in honor of U.S. District Judge Sarah T. Hughes, a former trustee of the Dallas Bar Foundation, who devoted herself to improving the rights of women and minorities. The Hughes Scholarship at the Dedman School of Law at SMU provides tuition and fees for deserving minority students each year. The Dallas Bar Foundation takes its responsibility for finding deserving recipients seriously. If you’ve ever met a Hughes Scholar, you know how impressive these students are. Support them by coming to Bar None. Thousands of volunteer hours go into putting on such a large production each year. The hours come from lawyers all over the metroplex, including 27-year veteran Director Martha Hardwick Hofmeister and Producer Tom Mighell, as well as the choreographers, script writers, committee members, actors and numerous behindthe-scenes staff. All of these Bar Noners share a passion for making a difference in the lives of the Scholars, our legal community and, for a few hours, the audience members. Show your support for the Dallas legal community and the Hughes Scholars by heading to the Greer Garson Theatre on the SMU Campus June 6-9. To purchase tickets, visit www.barnoneshow.com. Contact Elizabeth Philipp, Dallas Bar Foundation Executive Director, at (214) 220-7487 or ephilipp@dallasbar. HN org for sponsorship and ticket information. Kandice Bridges is a Senior Director in the Compensation and Benefits Practice of Alvarez & Marsal Taxand, LLC and Chair of the Marketing Committee of the Bar None Production Company. She can be reached at kandicebridges@sbcglobal.net.
On Saturday, February 18, the DBA Community Involvement and Home Project Committees sponsored a “warehouse” build day at the Habitat for Humanity facility in West Dallas. The constructed walls and other portions of the house were ultimately delivered to this year’s home site. Sunbelt Reporting and Litigation Services provided lunch for the volunteers.
Focus
Real Property/Environmental Law
Real Estate Commissions for Brokers and Attorneys By Lisa Tomiko Blackburn
Most lawyers know that the statute of frauds applies to real estate conveyances. However, many are not aware that the statute of frauds also extends, by statute, to real estate sales commissions. This article will discuss case development in 2011 applicable to brokers, a statutory amendment in 2011 applicable to lawyers, and general guidance that is critical to ensuring that attorneys and clients can enforce real estate commission agreements and get paid.
Background History
The Statute of Frauds has royal origins, deriving from “An Act for the Prevention of Frauds and Perjuries” under the reign of King Charles II of England in 1677. The Statute of Frauds was enacted by the Congress of the Republic of Texas in 1840. An iteration of the statute appeared in the Texas Revised Civil Statutes in 1925, and was later codified in Texas’ Business and Commerce Code in 1967. In 2003, the Texas Real Estate License Act (RELA) incorporated a version into Texas Occupations Code (TOC)
Inside 3 Fracking Update 7 New OSHA Guidance on Indoor Air Quality 9 Loan Modifications: A Few Considerations 11 Merger Clauses and Fraudulent Inducement Claims
Section 1101.806(c) to prevent “frauds” in the context of real estate sales commissions. With its longstanding history, one might assume that interpretation of the statute of frauds, as applied to “dirt law,” is well established. Perhaps surprisingly, this area continues to evolve.
Brokers’ Commissions
In May 2011, the Dallas Court of Appeals interpreted RELA’s statute of frauds provision in Neary v. Mikob Properties, Inc. 340 S.W.3d 578, (Tex. App.—Dallas 2011, no pet.). The case reinforced a strict constructionist trend in interpreting Section 1101.806(c). To fulfill the requirements of RELA, an agreement for commission should: (1) be in writing, and be signed by the person charged with the commission. Notably, Texas courts have largely refused to extend equitable statute of frauds exceptions—such as part performance—to the interpretation of Section 1101.806(c). In Neary, the Court declined to enforce a term sheet (that both identified “Seller” as the commission obligor and was
signed by the property-selling defendant), in part because the defendant was not explicitly defined as “Seller.” The commission obligor should execute a written commission agreement and be clearly identified as the party responsible for paying commission. (2) promise that a definite commission will be paid or refer to a written commission schedule. If the evidence supporting a commission enforcement action is comprised of a non-binding term sheet, the plaintiff’s prospects are grim. A commission agreement should include (or incorporate) unequivocal commission terms. (3) state the name of the broker to whom commission shall be paid. Neary underscored a factor critical to numerous Texas decisions: the commission-earning party identified in the agreement must be a licensed broker when services commence. This means if a person is a broker, that person’s designee (who is not a broker) may not be listed as the broker in the commission agreement. A party who is not licensed at the time continued on page 7
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