Real Estate Salesperson · Texas: Contracts · 10 min read
Statute of frauds and seller disclosure requirements
- Identify agreements subject to the Texas statute of frauds and legal requirements for collecting brokerage commissions under Texas law.
- Explain the mandatory written agreement rules and timelines required before performing brokerage acts for prospective residential buyers.
- Apply statutory seller disclosure requirements, exemptions, and buyer remedies under the Texas Property Code.
The Texas Statute of Frauds and Broker Compensation
In Texas, the statute of frauds dictates that certain promises and agreements cannot be enforced by a court unless they meet strict writing standards. Under Texas law, a promise or agreement covered by the statute of frauds is not enforceable unless the promise or agreement, or a memorandum of it, is in writing (Tex. Bus. & Com. Code §26.01(a)(1)). Additionally, the promise or agreement must be signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him (Tex. Bus. & Com. Code §26.01(a)(2)).
The statute of frauds covers several specific types of agreements. These include a contract for the sale of real estate (Tex. Bus. & Com. Code §26.01(b)(4)), a lease of real estate for a term longer than one year (Tex. Bus. & Com. Code §26.01(b)(5)), and an agreement which is not to be performed within one year from the date of making the agreement (Tex. Bus. & Com. Code §26.01(b)(6)). It also applies to a promise by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate (Tex. Bus. & Com. Code §26.01(b)(1)), a promise by one person to answer for the debt, default, or miscarriage of another person (Tex. Bus. & Com. Code §26.01(b)(2)), and an agreement made on consideration of marriage or on consideration of nonmarital conjugal cohabitation (Tex. Bus. & Com. Code §26.01(b)(3)). Furthermore, it governs promises or agreements to pay a commission for the sale or purchase of an oil or gas mining lease (Tex. Bus. & Com. Code §26.01(b)(7)(A)), an oil or gas royalty (Tex. Bus. & Com. Code §26.01(b)(7)(B)), minerals (Tex. Bus. & Com. Code §26.01(b)(7)(C)), or a mineral interest (Tex. Bus. & Com. Code §26.01(b)(7)(D)).
When you seek to collect a real estate commission in Texas, you must satisfy additional statutory hurdles under The Real Estate License Act. A person may not maintain an action to collect compensation for an act as a broker or sales agent performed in Texas unless the person alleges and proves being a license holder at the time the act was commenced or an attorney licensed in any state (Tex. Occ. Code §1101.806(b)). Furthermore, a person may not maintain an action in Texas to recover a commission for the sale or purchase of real estate unless the promise or agreement on which the action is based, or a memorandum, is in writing and signed by the party against whom the action is brought or by an authorized person (Tex. Occ. Code §1101.806(c)). A license holder who fails to advise a buyer as provided by Section 1101.555 may not receive payment of or recover any commission agreed to be paid on the sale (Tex. Occ. Code §1101.806(d)).
These restrictions under Section 1101.806 have explicit boundaries. Section 1101.806 does not apply to an agreement to share compensation among license holders (Tex. Occ. Code §1101.806(a)(1)). Additionally, Section 1101.806 does not limit a cause of action among brokers for interference with business relationships (Tex. Occ. Code §1101.806(a)(2)). For example, if Carlos agrees orally to split an earned commission with fellow license holder Maria, Section 1101.806 does not bar Maria from enforcing that fee sharing arrangement against Carlos.
Common mistakes
- An oral lease for exactly one year is not covered solely because of its lease term, but an agreement that cannot be performed within one year from the date it is made is separately subject to the Texas statute of frauds.
- Assuming a buyer agent can show residential property first and get the written representation agreement signed later; Texas law mandates entering into the written agreement before showing any residential real property.
- Thinking that a showing-only agreement under Section 1101.562 can last for standard multi-month terms; Texas law expressly caps its termination date at no more than 14 days from execution and prohibits exclusivity.
- Confusing the 100-year floodplain with the 500-year floodplain; a 100-year floodplain carries a 1 percent annual flood chance, while a 500-year floodplain carries a 0.2 percent (two-tenths of one percent) annual chance and is mapped as Zone X (shaded).
Key points
- Under the Texas statute of frauds, contracts for real estate sales, leases over one year, agreements not performable within one year, and mineral or oil and gas commission agreements must be in writing and signed (Tex. Bus. & Com. Code §26.01).
- Under Section 1101.806, an action to collect compensation for brokerage acts performed in Texas requires proof of licensure when the act commenced or status as an attorney licensed in any state; an action in Texas to recover a real estate sale or purchase commission requires a signed written promise, agreement, or memorandum, and a license holder who fails to advise a buyer as provided by Section 1101.555 may not receive or recover the commission agreed to be paid on the sale.
- A license holder performing brokerage acts for a prospective residential buyer must enter into the required written agreement before showing residential property or, if no residential property will be shown, before presenting an offer on the buyer's behalf; the agreement must include the terms and disclosures specified in Section 1101.563(c).
- Agreements solely to show property under Section 1101.562 cannot be exclusive or state a termination date more than 14 days after entry; a separate agreement is required if additional brokerage acts are to be provided after the showing (Tex. Occ. Code §1101.563(d), (e)).
- Unless a Section 5.008(e) exemption applies, a seller of Texas residential real property comprising not more than one dwelling unit must deliver the prescribed or a substantially similar property condition notice on or before the effective date of the contract binding the purchaser; if the contract is entered without the notice, the purchaser may terminate for any reason within seven days after receiving it.
- Sellers and agents have no duty to disclose deaths by natural causes, suicides, unrelated accidents, or previous occupant HIV/AIDS status (Tex. Prop. Code §5.008(c)).
- Unless an applicable exception removes the requirement, vacant-land transfer contracts must include the prescribed additional-tax notice and sellers must provide the possible-annexation notice before the contract binds the purchaser; when a required tax notice is omitted, the transferee may recover specified additional taxes and interest arising from the transfer or a change in use before the fifth anniversary of the transfer.
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Original lesson written for Real Estate Salesperson practice · updated October 30, 2026. Exam names are trademarks of their owners; tests.global is not affiliated with them.