Present: Carrico, C.J., Compton,1 Lacy, Hassell, Keenan, Koontz, 

and Kinser, JJ. 

PARDOE & GRAHAM REAL ESTATE, INC. 

v. Record No. 990531 OPINION BY JUSTICE BARBARA MILANO KEENAN 

 March 3, 2000 

SCHULZ HOMES CORPORATION 

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 

Robert W. Wooldridge, Jr., Judge 

 In this appeal, we consider whether the statute of frauds 

barred a real estate brokerage firm from recovering damages for 

breach of an oral contract for a commission on the sale of a 

custom home to be constructed on a lot already owned by the home 

buyer. 

 Schulz Homes Corporation (Schulz), a residential 

construction contractor, filed a motion for judgment against 

Pardoe & Graham Real Estate, Inc. (Pardoe), a real estate 

brokerage firm. Schulz alleged that Pardoe intentionally 

interfered with Schulz's contractual relationship with Lake 

Manassas Limited Partnership (the developer), and prevented 

Schulz from constructing homes in the developer's residential 

subdivision in Prince William County known as Lake Manassas.2

 1

Justice Compton participated in the hearing and decision of 

this case prior to the effective date of his retirement on 

February 2, 2000. 

2

The claims set forth in Schulz's motion for judgment are 

not at issue in this appeal. 
 Pardoe filed a counterclaim against Schulz, alleging that 

Schulz owed Pardoe a 6% commission, or in the alternative, a 

2.5% commission, on Schulz's sale of a custom home to Edward and 

Paula A. Carlton. Schulz built the home for the Carltons on a 

lot in Lake Manassas that they had owned for about two years 

before their home was constructed. 

 The following evidence was presented in a jury trial. In 

1992, Dale K. Schulz, who was president of Schulz, signed a 

document entitled "Approved Speculative Builder Application and 

Agreement" (Builder Application). This document set forth the 

requirements for builders seeking to be "approved" by Lake 

Manassas' owner to purchase lots and construct homes in the 

development for sale to the public.3

 Under Paragraph 5 of the Builder Application, Schulz agreed 

that when it purchased a lot in Lake Manassas for the purpose of 

constructing a "speculative" home, Schulz would sign a six-month 

exclusive listing agreement with the developer's designated 

sales agent, Pardoe. This paragraph further provided that 

Schulz would pay Pardoe a 6% commission on the sale of a 

"speculative" home that Schulz constructed. 

 3

At the time Schulz signed the "Approved Speculative Builder 

Application and Agreement," Lake Manassas was owned by D.C. Land 

Group, Ltd. The developer later succeeded D.C. Land Group, Ltd. 

as the owner of the project. 

2
 Warren B. Watkins, the developer's project director, 

testified that an amendment to the Builder Application form 

(Application Amendment) was presented to the approved builders, 

including Schulz, and discussed at a meeting in November 1993. 

Under the Application Amendment, Pardoe was entitled to a 2.5% 

commission when an "approved" builder constructed a custom home 

on a lot in Lake Manassas already owned by the purchaser of the 

home. Schulz did not sign the Application Amendment. 

 In November 1994, Schulz entered into a contract with the 

Carltons to construct a home on their lot in Lake Manassas. 

Edward Carlton testified that when he and his wife decided to 

build a home on their lot, they went to the developer's on-site 

sales office that was staffed by Pardoe's agent, David Johnson. 

Johnson directed the Carltons into a room where there were 

displays containing photographs and descriptions of home models 

offered by the various "approved" builders. The Carltons 

solicited bids from three of the "approved" builders and 

ultimately selected Schulz to construct their custom home. 

 Johnson testified that at the time Schulz and the Carltons 

entered into their contract, he spoke with Dale Schulz and 

indicated that he would send a document entitled "Report of Sale 

and Commission Earned" to Dale Schulz for his signature. This 

document contained an acknowledgement that Schulz would pay a 

2.5% commission to Pardoe based on the final price of the 

3
Carltons' home. Johnson testified that Dale Schulz told him 

that there was "no need" to send the document, since Schulz 

recognized Johnson as the agent and agreed to "honor the 

builder's agreement" and to pay the commission. Since he 

believed that he had a "good working relationship" with Schulz, 

Johnson made a notation on the document that he had talked with 

Dale Schulz and did not obtain his signature. 

 Contrary to Johnson's testimony, Dale Schulz testified that 

he never agreed to pay Pardoe a commission on the home Schulz 

sold to the Carltons. He also stated that he recalled receiving 

a document entitled "Report of Sale and Commission Earned," 

which was prepared by Johnson, but "didn't take any action" 

after receiving the document. 

 At the close of the evidence, the jury was instructed, 

among other things, that a "contract is an agreement, either 

written or oral, for consideration, between two or more 

parties." The jury returned a verdict in favor of Pardoe on its 

counterclaim against Schulz and awarded Pardoe damages in the 

amount of $12,088.13, which was equal to 2.5% of the price that 

the Carltons paid Schulz for construction of their home. 

 Schulz filed a motion to set aside the jury verdict on the 

counterclaim on the ground that the statute of frauds barred 

Pardoe's "claim for a real estate commission." The trial court 

issued an opinion letter in which it ruled that Pardoe's 

4
counterclaim against Schulz "is a claim for a real estate 

commission and is subject to § 11-2 of the Code of Virginia (the 

statute of frauds)." Holding that Schulz had not signed a 

written document entitling Pardoe to a commission on the Carlton 

home, the court entered a final order setting aside the jury 

verdict on the counterclaim and awarding judgment in favor of 

Schulz on that claim. 

 On appeal, Pardoe argues that the oral contract on which 

the jury verdict was based was not an "agreement or contract for 

services to be performed in the sale of real estate," within the 

meaning of Code § 11-2(7). Thus, Pardoe contends that the 

statute of frauds did not bar Pardoe from recovering damages 

based on that oral agreement to pay Pardoe a commission on the 

sale to the Carltons. Pardoe also asserts that since this oral 

agreement was not subject to the statute of frauds, the trial 

court erred in concluding that the evidence did not support the 

jury verdict on the counterclaim. 

 In response, Schulz does not dispute the jury's finding 

that there was an oral contract but argues that the contract was 

unenforceable based on the statute of frauds because it related 

to the sale of a house to be affixed to land. Schulz asserts 

that in the absence of written documentation of an agreement by 

Schulz to pay Pardoe a commission on that sale, Code § 11-2(7) 

barred Pardoe's claim and the evidence was insufficient as a 

5
matter of law to support the jury verdict on the counterclaim. 

We disagree with Schulz's arguments. 

 The General Assembly codified the statute of frauds in Code 

§ 11-2, which states in relevant part: 

Unless a promise, contract, agreement, representation, 

assurance, or ratification, or some memorandum or note 

thereof, is in writing and signed by the party to be 

charged or his agent, no action shall be brought in 

any of the following cases: 

. . . . 

6. Upon any contract for the sale of real estate, or 

for the lease thereof for more than a year; 

7. Upon any agreement or contract for services to be 

performed in the sale of real estate by a party 

defined in § 54.1-2100 or § 54.1-2101; 

 In applying the language of Code § 11-2(7), we must answer 

the question whether Pardoe's oral contract with Schulz was an 

"agreement or contract for services to be performed in the sale 

of real estate by a party defined in § 54.1-2100 or § 54.1-

2101." Id. We first observe that Code § 11-2 does not define 

the term "real estate." Further, while Code §§ 54.1-2100 and -

2101 define the terms "real estate broker" and "real estate 

salesperson" in the context of statutory provisions regulating 

those occupations, the term "real estate" also is not defined in 

Title 54.4 Therefore, we turn to the general definition of "real 

 4

The terms "real estate broker" and "real estate 

salesperson" are not at issue in this appeal. 

6
estate" in Code § 1-13.12, which provides in material part: 

"[T]he words 'real estate' shall be construed to include lands, 

tenements and hereditaments, and all rights and appurtenances 

thereto and interests therein, other than a chattel interest." 

 The word "tenement" means either an estate or holding of 

land, or a house or other building used as a residence. Black's 

Law Dictionary 1480 (7th ed. 1999); see 1 Raleigh Colston Minor 

& Frederick Deane Goodwin Ribble, The Law of Real Property § 17 

(2d ed. 1928). The term "hereditament," in general, signifies 

any interest in real property that may be inherited by an 

owner's heirs. See 1 Raleigh Colston Minor & Frederick Deane 

Goodwin Ribble, The Law of Real Property at § 17; Caroline N. 

Brown, 4 Corbin on Contracts § 17.1 (rev. ed. 1997). 

 The words used in Code § 1-13.12 to define the term "real 

estate" plainly do not encompass a building that is unattached 

to land. Since construction of the Carlton home had not begun 

at the time of the oral contract between Pardoe and Schulz, the 

home was neither an "appurtenance" to land nor a "tenement," 

within the meaning of the statutory definition. We hold that 

under the definition of "real estate" in Code § 1-13.12, a 

"contract for services to be performed in the sale of real 

estate," as contemplated by Code § 11-2(7), does not include an 

agreement such as the oral contract between Pardoe and Schulz. 

Thus, an oral contract providing for a sales commission is not 

7
subject to the statute of frauds when that contract is based on 

the sale of a house to be affixed to land that does not include 

a contemporaneous sale of the land to which the house will be 

attached. 

 Our conclusion is in accord with other authorities that 

have considered this subject. Generally, "contracts to erect 

buildings or other structures upon land are not within the 

[s]tatute [of frauds], although the structures when completed 

will be real estate." 9 Samuel Williston & Richard A. Lord, A 

Treatise on the Law of Contracts § 25:15 (4th ed. 1999) 

(emphasis added); see also Caroline N. Brown, 4 Corbin on 

Contracts § 17.1 (rev. ed. 1997); Hastings v. Matlock, 171 Cal. 

App. 3d 826, 836-7 (Cal. Ct. App. 1985); McCaffrey v. Strainer, 

439 N.Y.S. 2d 773, 774 (N.Y. App. Div. 1981). Thus, since 

Pardoe's counterclaim did not require proof of a writing 

executed by Schulz obligating it to pay a commission on the sale 

of a home to the Carltons, we hold that the trial court erred in 

concluding that the statute of frauds barred Pardoe's recovery 

of damages under an oral contract.5

 5

The trial court's final order set aside the jury verdict on 

the counterclaim "upon the grounds assigned by [Schulz] as being 

contrary to the law and the evidence in this case and without 

evidence to support it." The grounds Schulz raised in the trial 

court exclusively addressed the issue of the statute of frauds 

and the absence of any written document containing an agreement 

by Schulz to pay a real estate commission on the sale of the 

home to the Carltons. Schulz did not argue in the trial court 

8
 For these reasons, we will reverse the trial court's 

judgment setting aside the jury verdict on the counterclaim and 

enter final judgment for Pardoe on the counterclaim in 

accordance with the jury verdict. 

Reversed and final judgment. 

 

that the evidence was insufficient to support the jury's finding 

of an oral contract between Pardoe and Schulz and, as noted 

above, Schulz has not raised this argument on appeal. Thus, we 

do not address the sufficiency of the evidence apart from our 

holding above. 

9