Broker and Agent Liability for Misrepresentation in Texas

In Texas real estate transactions, brokers and agents play a pivotal role. Buyers and sellers often rely heavily on their guidance, marketing materials, and representations. But when agents provide inaccurate information—intentionally or negligently—they may be held personally liable under both common law and the Texas Deceptive Trade Practices Act (DTPA).

This article explains when real estate professionals can be sued for misrepresentation, how courts evaluate their conduct, and what legal protections and duties apply to licensed agents and brokers in Texas.

Agents Can Be Personally Liable—Even in the Scope of Employment

A common misconception is that real estate agents cannot be sued personally if they were working on behalf of a brokerage. That is not the law in Texas.

In Miller v. Keyser, 90 S.W.3d 712 (Tex. 2002), the Texas Supreme Court held that a sales agent who made false statements about a lot’s fence placement—even while acting within the scope of his employment—was personally liable under the DTPA. The Court emphasized that the statute allows claims against “any person” whose conduct causes harm.

This means that an agent can be liable for misrepresentation even if:

  • They did not know the statement was false
  • They did not intend to deceive anyone
  • They were simply repeating information provided by the brokerage or seller

Key Duties of Agents and Brokers

Licensed Texas agents and brokers owe multiple layers of duty to their clients and, in some cases, to third parties. These include:

  • Fiduciary Duty: Loyalty, full disclosure, and fair dealing with their client
  • Statutory Duties: Compliance with the Texas Real Estate License Act (TRELA) and TREC rules
  • DTPA Liability: Avoidance of false, misleading, or deceptive statements in the course of a transaction

Agents must take reasonable steps to verify the accuracy of the information they provide. Repeating inaccurate information from the seller or MLS without checking may be enough to create liability.

Common Misrepresentation Traps for Agents

Agents can become liable for misrepresentations in various ways, including:

  • Stating or implying that improvements are within boundary lines when a survey would show otherwise
  • Advertising features (e.g., a pool, addition, or square footage) without verifying permits or compliance
  • Misstating zoning, school districts, or future development plans
  • Failing to disclose defects they observed or had actual knowledge of

Even vague assurances like “the roof is in great shape” can lead to litigation if later proven false and relied upon by the buyer.

How the DTPA Applies to Real Estate Agents

The Texas Deceptive Trade Practices Act allows consumers to sue for:

  • False, misleading, or deceptive acts or practices
  • Unconscionable conduct
  • Breach of express or implied warranties

Real estate agents are not exempt from these rules. In fact, the DTPA has been one of the most commonly used statutes against real estate professionals in Texas misrepresentation cases.

No intent is required under the DTPA. A false representation that causes harm—even if made innocently—can create liability.

Defenses for Brokers and Agents

Agents and brokers are not without recourse. Common defenses include:

  • Truth: The statement made was factually accurate
  • No reliance: The buyer did not actually rely on the representation
  • Buyer investigation: The buyer had access to contradicting documents or failed to inspect
  • Opinion or puffery: The statement was a general opinion, not a specific fact

Additionally, if the agent merely passed along information from the seller or a third party and identified the source, the court may weigh that in their favor—but it is not a complete defense.

Statutory Indemnity Rights

The DTPA provides that an agent who is held liable for misrepresentation may seek indemnity from another responsible party. For example, if the seller knowingly provided false information, and the agent repeated it in good faith, the agent may be able to seek reimbursement from the seller.

However, this right does not protect the agent from being sued directly—it simply allows them to recover damages later, if successful.

Best Practices for Agents to Minimize Risk

To reduce exposure to misrepresentation claims, Texas brokers and agents should:

  • Confirm key facts with independent sources (surveys, permits, etc.)
  • Avoid making absolute statements unless personally verified
  • Use disclaimers and refer buyers to third-party professionals
  • Keep detailed records of communications with clients
  • Stay up to date on TREC guidelines and case law

Clear, documented communication is often the best defense when disputes arise.

Summary

Texas law places real responsibility on brokers and agents for the accuracy of the information they provide. Acting within the scope of employment does not shield real estate professionals from personal liability under the DTPA or common law torts. Real estate professionals should take care to verify, document, and disclose—all while staying mindful of the legal standards that apply to their conduct.

In the next article, we’ll explore how the DTPA operates in real estate misrepresentation claims and why it’s such a powerful tool for plaintiffs.

Next: Using the DTPA in Real Estate Misrepresentation Claims