Suit Arises Over Property Descriptions

Broker Prevails in Idaho Supreme Court Ruling

October 1, 2009

The Idaho Supreme Court has ruled in favor of a real estate broker whose commissions totaling nearly $1 million were in jeopardy after a developer claimed that the listing agreements were invalid due to insufficient property descriptions.

In the case, Callies v. O’Neal, a broker entered into two listing agreements with a condominium developer. Because the condo projects were not finished when the agreements were executed, the agreements didn’t include a legal description for each property. Instead, the agreements referenced each development’s name and an "addendum No. 1." The addendum was not attached at the time of execution, but the plat and individual legal property descriptions were later added.

The broker marketed the properties, managed earnest money deposits, and wrote up purchase contracts, among other tasks. But after the sale of some units, the developer stopped paying commissions, claiming that the listing agreements were invalid because they lacked a complete legal description of the properties.

The broker sued to recover the commission payments, but the district court ruled in favor of the developer, saying the contracts were indeed unenforceable. On appeal, the Idaho Supreme Court reversed the lower court after examining several state statutes—including one that requires a legal property description in real estate contracts and another that allows for a less exact description. The court found that the more lenient description satisfies requirements for listing agreements, as long as it’s clear to the broker and the owner which property is being offered for sale.

The case is now headed back to trial court for further proceedings. In the meantime, the broker is allowed to pursue a claim for the unpaid commissions. The NATIONAL ASSOCIATION OF REALTORS® provided legal support to the broker in the case.

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.

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