Legal Question in Real Estate Law in California

Re: Is an Oral Agreement Binding?

First, oral agreements are binding except in a few situations where the agreement is required to be in writing and signed by the person against whom it is to be enforced. One of the agreements that must be in writing is a sale of an interest in real estate, or a lease for more than a year. There are even some ways to enforce oral real-estate agreements if non-enforcement is very unfair, but this is unusual.

OK, then an agreement of the general type we're talking about here IS enforceable in theory.

The story doesn't stop there, though. First, in order for there to be an agreement at all, whether oral or written, it must be sufficiently definite to show that there was a 'meeting of the minds' and an intention to be bound. Mere talk or discussion of some of the terms of a deal does not amount to a contract. Even where some of the terms are agreed upon, failure to agree on other important terms may show that the parties are not yet 'in contract.'

This is just a long-winded way to say that your mother's discussions with these prospective tenants might be enforceable, but quite possibly did not progress to the point of full agreement and hence there is nothing binding.

If it comes down to a lawsuit in small-claims court, a large part of the 'who wins?' question depends upon witness credibility and quality of evidence. If you can convince the judge that the conversation went EXACTLY as you report it, and any evidence to the contrary from the other side is not very credible, it looks to me like the parties were still in preliminary negotiations and neither the tenants nor the landlord is bound by anything said. The parties were still hemming and hawing about price.

However, I have to caution you that so much depends upon witness credibility (and honesty) the outcome is hard to predict.