Understanding the Statute of Frauds & Contract Requirements
One question that comes up from time to time in real estate transactions is whether a buyer can keep their identity confidential. Maybe it’s a high-profile individual, an investor who doesn’t want to tip their hand in a competitive market, or simply someone who values privacy. The instinct is often to ask: Can I withhold my name from the purchase contract and stay anonymous until closing?
The short answer: No. At least not if you want a valid, enforceable contract. Here’s why.
The Statute of Frauds and the Necessity of a Writing
Real estate contracts fall squarely within what lawyers call the “Statute of Frauds.” This isn’t a new law—it’s a legal doctrine that dates back centuries. At its core, the Statute of Frauds requires that certain types of contracts, including those for the sale of real estate, must be in writing and signed by the parties to be enforceable.
The reasoning is simple: because real estate transactions are significant and valuable, the law doesn’t allow handshake deals or vague promises. A written document is required to clearly memorialize the agreement.
Identity of the Parties
One of the most basic requirements of a written real estate contract is that it must identify the parties—both the buyer and the seller. Without that information, there’s no way to determine who has rights or obligations under the agreement.
Imagine a contract that simply says “Seller agrees to sell 123 Main Street for $500,000 to an unnamed buyer.” If the buyer later refuses to close, who do you sue? Or if the seller tries to walk away, who has standing to enforce the deal? Without the identity of the buyer, the contract fails a fundamental requirement of contract law.
Privacy Concerns and Alternatives
That said, buyers do have ways to preserve a level of privacy without jeopardizing the validity of the contract, including but not limited to:
• Use of an Entity: Instead of signing as an individual, a buyer can create a limited liability company (LLC) or trust to take title. The entity’s name will appear on the contract, shielding the individual’s name.
• Assignments: A buyer may sign the contract in their own name with the intent to later assign the contract to an entity. However, the original contract must still identify the buyer, and any assignment must comply with the terms of the agreement.
Bottom Line
The Statute of Frauds requires that a real estate contract be in writing and clearly identify the parties. A buyer who tries to remain completely anonymous and withhold their identity risks ending up with a contract that isn’t enforceable. The better approach is to plan ahead—work with your attorney to structure the transaction in a way that respects both your privacy and the law.