In a state like Texas, where business often thrives on personal relationships and mutual trust, handshake deals are still surprisingly common. From land sales between neighbors to lease agreements in commercial spaces, not every real estate transaction begins with a contract thick enough to double as a phone book. But when things go south, the question arises: can a verbal agreement over property actually be enforced in court?
The short answer is usually no, but with important exceptions. Texas real estate law, like most states, is governed by the Statute of Frauds, a legal doctrine that requires certain contracts, including those involving land, to be in writing. Yet despite this, some verbal promises find their way into courtrooms, especially when substantial actions have already been taken. Knowing when a handshake can lead to a lawsuit—and when it’s legally worthless—can mean the difference between protecting your investment or walking away empty-handed. In these murky situations, the guidance of a seasoned Houston real estate litigation lawyer can help you separate myth from enforceable reality.
The Statute of Frauds and Why It Matters
Texas’s Statute of Frauds is designed to prevent confusion, fraud, and false claims by requiring certain agreements to be in writing. Real estate transactions—including sales, leases longer than one year, and contracts for improvements on land—are squarely within its scope. This means that, in most cases, a verbal agreement to sell or transfer property is unenforceable in court.
But the Statute of Frauds doesn’t just require words on paper—it demands specific elements: a description of the property, the names of the parties, the price, and a signature. Without these components, a judge will likely dismiss the case. That said, there are situations where verbal agreements can still create legal exposure if other legal doctrines apply.
Part Performance: The Big Exception to the Rule
One of the few ways to enforce a verbal real estate agreement in Texas is through the doctrine of part performance. This rule allows courts to uphold an oral contract if one party has already taken significant, irreversible steps based on the agreement, such as taking possession of the property, making improvements, or paying a substantial portion of the purchase price.
The logic is simple: it would be unfair to allow one party to benefit from another’s actions without honoring their side of the deal. However, the standard is high. Occasional maintenance or casual payments likely won’t suffice. The actions must clearly and convincingly point to the existence of a contract. Even then, it’s a legal gamble, not a guarantee.
Equitable Estoppel and Promissory Reliance
In rare cases, courts may invoke equitable estoppel to enforce a verbal agreement when one party made a promise, the other relied on it to their detriment, and injustice would result from denying the agreement’s existence. This is particularly relevant when someone is induced to forego other opportunities or take financial risks based on a verbal commitment.
However, courts apply this doctrine cautiously. The party claiming estoppel must prove not only reliance but that the reliance was reasonable under the circumstances. For example, trusting a relative in a casual conversation is not the same as acting on a detailed business negotiation. Courts scrutinize these claims closely, and legal documentation always carries more weight.
Verbal Agreements in Leases and Improvements
Not all real estate issues involve outright sales. Verbal lease agreements under one year are generally enforceable in Texas, but anything beyond that term falls back under the Statute of Frauds. Even then, disagreements over rent increases, renewal terms, or maintenance obligations often lead to conflict.
Similarly, agreements for improvements, such as “build-to-suit” arrangements or promises to reimburse renovation costs, must also be written to be enforceable. Tenants and property owners alike often run into trouble when relying on verbal assurances for construction or upgrades, especially when business relationships change. Without a signed contract, courts are unlikely to enforce reimbursement or completion.
Risks of Relying on a Handshake in Commercial Deals
In the commercial world, handshake deals may signal trust, but they often lead to disaster. Unlike consumer transactions, business agreements are presumed to involve sophisticated parties who should know better. Courts expect commercial real estate transactions to be thoroughly documented, and verbal promises are rarely accepted as binding evidence.
Moreover, large commercial deals typically involve multiple parties, lenders, brokers, and regulatory requirements. Trying to rely on a casual conversation in such a setting is not only risky—it’s legally unsound. If a deal falls through and you don’t have a signed agreement, chances are you’ll be left with few options and no enforceable rights.
Fraud Claims Based on Oral Representations
Although verbal real estate agreements are hard to enforce, false statements made during the negotiation process can still give rise to fraud claims. If one party intentionally misrepresented a material fact, such as zoning, permitted use, or the existence of liens, then the other party may sue for damages, even if there was no written contract.
The burden of proof is high in these cases, and courts will demand clear evidence of the misrepresentation, reliance, and harm caused. Fraud claims can survive even when the underlying deal doesn’t. They provide a separate legal avenue for holding bad actors accountable when the usual rules around written contracts leave victims empty-handed.
Digital Messages: Do Texts or Emails Count?
In today’s world, real estate deals often unfold over email or text. But can a string of messages count as a written contract? Sometimes, yes. Texas courts have increasingly acknowledged that digital communication can satisfy the Statute of Frauds, so long as the essential elements of the contract are included and there’s an electronic signature or authentication.
That means an email with a clear offer, acceptance, property description, and price—plus a name typed in the signature line—might hold legal weight. However, not all messages meet the legal standard, and casual back-and-forth can muddy the waters. Parties relying on digital communication must ensure clarity, consistency, and formal intent if they want the court to enforce it.
Don’t Bet Your Property on a Promise
At the end of the day, verbal agreements in real estate are built on risk. In the rare cases where they are enforceable, proving them requires significant evidence, a strong legal strategy, and a little bit of luck. For every handshake deal that ends well, there are dozens that result in broken promises and costly litigation.
If you’re entering any kind of property agreement—sale, lease, partnership, or development—get it in writing. If you’ve already acted on a verbal agreement and are now facing a dispute, speak with a legal professional immediately. Time, documentation, and legal experience can determine whether your claim survives or evaporates under scrutiny.