Understanding Arizona’s Real Estate Statute of Frauds

By February 3, 2020 Real Estate
Understanding Arizona’s Real Estate Statute of Frauds

Law is a profession rife with terms of art—you might even say that terms of art are the meat of the profession, because the law is essentially a linguistic system codifying concepts of legal relationships, prohibitions, existences, behaviors, rights, and duties. One term of art that confuses many laypeople is the concept of a “statute of frauds.” What this is, in essence, is a statute requiring particular sorts of contracts be put writing in order for them to be enforceable. In Arizona, this includes real estate transactions.

The first thing that trips people up about this is that many have never heard of a contract that was not in writing. But the fact is that contracts are made all the time without writing being part of the equation—these are generally known as oral contracts. But hundreds of years ago the courts realized that certain types of agreements were best left unenforced unless they were put into writing, because the likelihood of one party claiming there was a contract in place when in fact no agreement had been made could be too easily abused to cause detriment to another party (therein lies the “fraud”). Besides real estate, the sorts of contracts often requiring written contracts include promises of marriage, contracts whose execution would exceed a year in length to accomplish, contracts for the sale of goods higher than $500, and a few other particular situations.

Arizona’s Statute of Frauds—particularly the portion that concerns real estate—can be found codified in A.R.S. section 44-101(6), which reads, in relevant part:

No action shall be brought in any court in the following cases unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized:

  1. Upon an agreement for leasing for a longer period than one year, or for the sale of real property or an interest therein. Such agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing, subscribed by the party sought to be charged.

So clearly, in Arizona, as in other states, no one may claim a party contracted to purchase a parcel of property without being able to produce, in court, record of the “buyer” having signed a contract whose effect was the purchase of property.

If you’re looking to engage with the real estate market in Scottsdale or anywhere else in the state of Arizona, you’ll need an experienced attorney with strong scruples on your side. Provident Law’s real estate attorneys represent parties on either side of real estate and financing transactions, including buyers, sellers, landlords, tenants, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We structure, negotiate and document a variety of real estate and financing transactions, such as leases, purchase and sale agreements, loans and development agreements for a variety of commercial and residential projects. Contact us for more details.

Christopher J. Charles is the founder and Managing Partner of Provident Law ®. He is a State Bar Certified Real Estate Specialist and a former “Broker Hotline Attorney” for the Arizona Association of REALTORS ® (the “AAR”). Mr. Charles holds the AV ® Preeminent Rating by the Martindale-Hubbell Peer Review Ratings system which connotes the highest possible rating in both legal ability and ethical standards. He serves as an Arbitrator and Mediator for the AAR regarding real estate disputes; and he served on the State Bar of Arizona’s Civil Jury Instructions Committee where he helped draft the Agency Instructions and the Residential Landlord/Tenant Eviction Jury Instructions.

Christopher is a licensed Real Estate Instructor and he teaches continuing education classes at the Arizona School of Real Estate and Business. He can be reached at Chris@ProvidentLawyers.com or at 480-388-3343.