Real Estate Tales from the Courtroom: The Buyers’ Broker’s Signature

 

The buyers signed the Buyer-Broker Employment Agreement.  Did the buyer’s agent?

Over an 18–month period the buyers and buyer’s agent entered into three Buyer–Broker Employment Agreements for a property with a desired purchase price of under four million dollars.

After the third Buyer-Broker Employment Agreement expired, the buyer’s agent sent an e-mail message to the buyer regarding four properties and asked the buyers to sign a new Buyer–Broker Employment Agreement.  The buyers signed the Agreement and sent it back to the buyer’s agent, who responded “thank you” with an email that ended with an electronic business card consisting of her name, business address, e-mail address, telephone numbers, website address, and photograph.

During the term of this forth Buyer–Broker Employment Agreement, the buyers purchased a home using another real estate agent and paid that agent a commission. The buyer’s agent sued the buyers for the commission set forth in the Buyer-Broker Employment Agreement.

The buyers argued there was no enforceable agreement because neither the buyer’s agent nor the agent’s broker had signed the Buyer-Broker Employment Agreement, as required by A.R.S. 32-2151.02(a)(4) . The buyer’s agent argued that A.R.S. §32–2151.02 is an Arizona Department of real Estate “regulatory statute” that did not bar this civil cause of action for the commission and that the buyers’ signatures on the Buyer-Broker Employment Agreement satisfied the Statute of Frauds. A.R.S. 44-101.

The buyer’s agent also claimed she had in fact signed the Buyer-Broker Employment Agreement by virtue of the thank you e-mail, which was “intended to be [her] signature and acceptance of the contract” pursuant to the Arizona Electronic Transactions Act. See A.R.S. 44-7001-7052.

The Court stated that the buyer’s agent was required to sign the Buyer-Broker Employment Agreement for it to be enforceable.  Further litigation ensued regarding whether the buyer’s agent’s electronic thank you email qualified as her signature. 

The ultimate outcome of the case is unknown to this author, but the lesson is clear.  To avoid this type of costly and time-consuming litigation, make sure and obtain all necessary signatures on all documents – including your own. 

Young v. Rose, 230 Ariz. 433

Michelle Lind is Of Counsel to the Arizona REALTORS® and the author of Arizona Real Estate: A Professional’s Guide to Law and Practice.  This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.  7/28/22