Defenses to Misrepresentation Claims in Texas Real Estate Law

In Texas real estate disputes, allegations of fraud, negligent misrepresentation, or DTPA violations are serious—but they are not always successful. Sellers, agents, and brokers have several powerful defenses that, when properly asserted, can defeat or limit liability for misstatements or omissions during a property transaction.

This article outlines the most effective legal defenses to real estate misrepresentation claims in Texas, including contract-based protections, evidentiary challenges, and statutory bars.

1. Lack of Justifiable Reliance

Whether the claim is for fraud, negligent misrepresentation, or a DTPA violation, reliance is a core element. If the plaintiff did not rely on the alleged misstatement—or if their reliance was unreasonable under the circumstances—the claim fails.

Courts will often examine:

  • Whether the buyer conducted an independent inspection
  • If the buyer had access to documents that contradicted the alleged misstatement
  • The buyer’s level of sophistication and experience
  • Whether the buyer asked clarifying questions or ignored red flags

For example, if a buyer signs off on a survey or inspection report that contradicts verbal representations, a court may find that reliance on those verbal statements was not justified.

2. The “As-Is” Clause

Texas courts generally enforce “as-is” clauses that disclaim reliance on prior representations. Such clauses can insulate sellers from liability for property defects or conditions—unless fraud or active concealment is proven.

To be effective, an “as-is” clause must be:

  • Freely negotiated
  • Clear and specific
  • Not used to shield fraud or prevent inspections

In Prudential Ins. Co. v. Jefferson Associates, the Texas Supreme Court held that an “as-is” clause barred recovery unless the buyer could show that it was induced by fraud. However, courts will not enforce such clauses blindly—especially in residential transactions where power is imbalanced or information is withheld.

3. Truth of the Statement

One of the simplest defenses is that the representation was factually accurate. If the seller or agent’s statement turns out to be true—even if the buyer misunderstood it—there is no liability.

For example, stating that a roof is “10 years old” when documentation supports that age is not a misrepresentation, even if the buyer expected a newer roof.

4. Opinion, Puffery, or Predictions

Statements of opinion or general optimism are typically not actionable. Courts distinguish between factual misstatements and puffery—such as “this is a great investment” or “this neighborhood is booming.”

Similarly, predictions about future performance or development (e.g., “a shopping center will be built nearby”) are not generally actionable unless made with knowledge of falsity.

5. No Duty to Disclose

Sellers are not obligated to disclose everything. In Texas, liability for nondisclosure arises only when the seller:

  • Knows of a material defect
  • Understands that the buyer is unaware of it
  • Fails to disclose it despite a duty to speak

If the defect was readily discoverable or disclosed through publicly available records, the seller may argue they had no duty to reveal it further.

6. Buyer Waived the Right to Complain

Buyers often waive certain rights in the contract itself, including the right to rescind or recover damages based on known conditions. If the buyer had knowledge of the issue before closing and chose to proceed anyway, courts may find they waived any right to sue over it.

This defense works best when the buyer:

  • Had actual knowledge of the issue
  • Conducted a full inspection and accepted the condition
  • Affirmatively agreed to take the property “as-is” post-inspection

7. Expired Statute of Limitations

Each type of misrepresentation claim is subject to a filing deadline:

  • DTPA: 2 years from the date of the act or discovery
  • Negligent misrepresentation: 2 years
  • Fraud: 4 years, with the discovery rule applying

If the claim is filed after these deadlines—and no valid exception applies—it can be dismissed outright. Courts will scrutinize when the buyer learned (or should have learned) of the misstatement.

8. No Causal Connection

Even if the plaintiff proves a false statement, they must show that the misstatement caused their damages. If the loss was due to unrelated market conditions, poor financial decisions, or later property issues, the defendant may escape liability.

For example, if a buyer overpays due to a bidding war—not a misstatement—there may be no legal causation linking the seller’s statement to the loss.

Summary

Misrepresentation claims are highly fact-specific and open to multiple defenses. Sellers, brokers, and agents who are accused of misleading conduct have numerous legal tools at their disposal—from “as-is” clauses and reliance defenses to procedural bars and lack of causation. The success of these defenses often hinges on contract language, buyer conduct, and documentary evidence.

In the final article of this series, we’ll bring it all together by providing strategic insights into how real estate misrepresentation cases are litigated in Texas—from early investigation to trial strategy and settlement leverage.

Next: Litigation Strategy for Real Estate Misrepresentation Claims