The Statute of Frauds Explained for Maryland Real Estate

Last updated: April 2026

If you are preparing for your Maryland real estate license, mastering contract law is a non-negotiable step toward your success. Among the most critical legal concepts you will encounter is the Statute of Frauds. This legal doctrine dictates which contracts must be in writing to be legally enforceable. Understanding its nuances is not only essential for passing your exam but also for protecting your future clients from costly legal disputes. For a broader overview of exam topics, be sure to bookmark our Complete Maryland Exam Guide.

What is the Statute of Frauds?

Originating from 17th-century English common law, the Statute of Frauds was designed to prevent perjury and fraudulent claims by requiring reliable evidence of an agreement. In the context of real estate, the "reliable evidence" is a written document. If a contract falls under the Statute of Frauds but is only made verbally, it is considered unenforceable. This means that while the contract might be valid in principle, a court will not force either party to fulfill its terms if a dispute arises.

Maryland-Specific Laws and the Statute of Frauds

In Maryland, the Statute of Frauds is codified in the Maryland Code, Real Property Article § 5-104. The statute explicitly states that no action may be brought upon any contract for the sale or disposition of land, or any interest in land, unless the contract (or some memorandum/note of it) is in writing and signed by the party against whom the contract is being enforced.

Which Real Estate Contracts Must Be in Writing in Maryland?

To comply with Maryland law and the rules set forth by the Maryland Real Estate Commission (MREC), the following agreements must be in writing:

Real Estate Sales Contracts: Any agreement to buy or sell real property, regardless of the purchase price.
Leases Exceeding One Year: A lease agreement that lasts for more than 365 days must be formalized in writing.
Deeds and Mortgages: Instruments that transfer an interest in property or use property as collateral.
Options to Purchase: Agreements giving a buyer the exclusive right to purchase property within a specific timeframe.
Brokerage Agreements: Under the Code of Maryland Regulations (COMAR), all listing agreements and buyer representation agreements must be in writing to be enforceable and compliant with state licensing laws.

The Exception: Short-Term Leases

One of the most frequent trick questions on the Maryland real estate exam involves the exception to the Statute of Frauds. In Maryland, a lease for a period of one year or less does not have to be in writing to be legally enforceable. A verbal month-to-month lease or a verbal six-month lease is legally binding. However, while verbal short-term leases are legal, real estate professionals should always recommend written leases to avoid ambiguity.

Maryland Contracts Requiring Written Form (%)

Essential Elements of a Sufficient Writing

For a written document to satisfy the Statute of Frauds in Maryland, it does not necessarily need to be a formal, multi-page contract drawn up by an attorney. A "memorandum or note" can suffice, provided it contains the essential elements:

Identity of the Parties: The document must clearly identify the buyer and the seller (or landlord and tenant).
Property Description: The property must be described with sufficient certainty (e.g., a legal description or a precise property address).
Key Terms and Conditions: The price, closing date, and any other material terms must be included.
Signatures: The document must be signed by the "party to be charged" (the person against whom enforcement is sought). Under the Maryland Uniform Electronic Transactions Act (UETA), electronic signatures are fully valid and binding.

Practical Scenarios for the Maryland Real Estate Exam

To help you prepare for the situational questions on the state exam, consider these practical scenarios:

Scenario 1: The Verbal Handshake Deal

The Situation: Buyer Bob and Seller Sue are neighbors. Over the fence, Bob offers Sue $400,000 for her house, and Sue verbally agrees. They shake on it. The next day, Sue receives an offer for $450,000 from someone else and decides to take it. Bob sues Sue to force the sale.

The Outcome: Bob will lose. Under Maryland's Statute of Frauds, contracts for the sale of real estate must be in writing. The verbal handshake agreement is unenforceable.

Scenario 2: The 18-Month Lease

The Situation: Landlord Larry verbally agrees to rent his Baltimore townhome to Tenant Tom for 18 months at $2,000 per month. Six months in, Larry tries to evict Tom without cause, claiming they have no written contract.

The Outcome: Because the lease term exceeds one year, the Statute of Frauds requires it to be in writing. Tom's verbal 18-month lease is unenforceable as an 18-month term, though Maryland courts may interpret his continued payment of rent as creating a month-to-month periodic tenancy.

Intersecting Concepts: Ethics, Advertising, and Disclosures

The Statute of Frauds does not exist in a vacuum; it heavily intersects with other regulatory frameworks you will be tested on.

For instance, ensuring that all agreements are accurately documented in writing is a core component of Maryland Real Estate Ethics and Standards. Failing to put a listing agreement in writing before marketing a property is not just a Statute of Frauds issue; it is a direct violation of COMAR.

Furthermore, without a written and signed listing agreement, an agent does not have the legal authority to place a "For Sale" sign in a yard or market the property online. You can learn more about these specific marketing rules in our guide on Maryland Advertising Regulations Compliance.

Written contracts also serve as the vehicle for mandatory state disclosures. When drafting a written sales contract, agents must ensure buyers are made aware of any outstanding financial obligations tied to the property, such as front foot benefit charges or HOA fees. For a deeper dive into these property-specific fees, review our article on Maryland Special Assessments Explained.

Frequently Asked Questions (FAQ)

Does a lease for exactly one year need to be in writing in Maryland?

No. In Maryland, a lease for exactly one year (365 days) or less does not fall under the Statute of Frauds and can be legally enforced even if it is a verbal agreement. However, any lease that exceeds one year must be in writing.

Are electronic emails and text messages sufficient to satisfy the Statute of Frauds?

They can be. Under the Maryland Uniform Electronic Transactions Act (UETA), electronic records and electronic signatures hold the same legal weight as paper documents and ink signatures. If an email exchange clearly outlines the essential terms of a real estate transaction and contains an electronic signature (which can be as simple as a typed name at the bottom of an email), a court may rule that it satisfies the Statute of Frauds.

What happens if a real estate contract is not in writing?

If a contract that is required to be in writing under the Statute of Frauds is only made verbally, it is classified as "unenforceable." This means that if one party backs out, the other party cannot use the court system to force them to complete the transaction or pay damages for breach of contract.

Does the Statute of Frauds apply to real estate broker commission agreements?

Yes. While the strict historical Statute of Frauds focuses on the transfer of real property, the Maryland Real Estate Commission (MREC) regulations explicitly require all listing agreements and buyer representation agreements to be in writing. A broker generally cannot sue a client for a commission based solely on a verbal agreement.

What is the "part performance" exception?

In rare cases, Maryland courts may enforce a verbal real estate contract if there has been "part performance." This typically occurs when a buyer has already paid a substantial portion of the purchase price, taken physical possession of the property, and made significant permanent improvements to it based on the verbal agreement. Because reversing the transaction would be highly unjust, a court in equity may waive the strict writing requirement. However, this is heavily fact-dependent and rare.