How many owners of property are required to sign the Listing Agreement?
The below scenario is one that has occurred and helps answers the question:
- Purchase agreement is sent to our office by the agent;
- We contact the buyers and sellers outlined on the purchase agreement to obtain additional information needed for a complete title search;
- During our conversations with the seller, we learn there are other family members that own the property;
- We contact the listing agent only to discover the listing agent was unaware that additional family members owned the property.
According to La. R.S. 37:1431(30) a “Listing agreement” means a written document signed by all owners of real estate and a listing agreement shall only be valid if signed by all owners or their authorized attorney in fact.
In Setliff v. Slayter, 38 So.3d 1230 (La.App. 3d Cir.6/2/10), a real estate agency entered into a listing agreement with one individual seller to sell property. The seller eventually breached the listing agreement.
The agency sued seller for breaching the listing agreement. Many months after litigation began, the individual seller tried to argue the listing agreement was not a valid contract because there were other owners of the property that did not sign the listing agreement.
The trial court and appellate court held that seller waited too late to make the legal argument there were other owners of the subject property and held that the seller was personally bound to the listing agreement.
But what happens if seller timely makes his legal argument that there are other owners of the property that didn’t sign the listing agreement? Would the Court hold the agent breached his/her duty by not obtaining signatures from all owners? Possibly.
Accordingly, agents should make every effort to determine the identity of all owners of a particular piece of property and have all owners of said property sign the listing agreement.
In order for an agent to reduce his/her risk, the following is recommended:
- Listing Agent should have a detailed discussion with the “seller” wherein the agent attempts to identify all owners of the property;
- Ask seller to confirm whether all owners are alive (if an owner is not alive, then a succession will need to be done).
- Be sure to have all owners sign the listing agreement.
For any questions regarding this email, please contact me at firstname.lastname@example.org.
H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE
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Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.