Using the DTPA in Texas Real Estate Misrepresentation Cases

The Texas Deceptive Trade Practices Act (DTPA) is one of the most powerful legal tools available to consumers who have been misled in a real estate transaction. Enacted to protect against false, misleading, and deceptive business practices, the DTPA offers broader remedies and fewer hurdles than traditional fraud or breach of contract claims.

This article explains how the DTPA applies to real estate transactions in Texas, the types of conduct it prohibits, and how buyers can use it to pursue claims against sellers, agents, and brokers.

What Is the DTPA?

The Deceptive Trade Practices Act is codified in Chapter 17 of the Texas Business & Commerce Code (§§ 17.41–17.63). It allows a consumer to sue “any person” who engages in:

  • False, misleading, or deceptive acts or practices
  • Breach of express or implied warranty
  • Unconscionable actions or courses of action

Importantly, no intent to deceive is required. The DTPA imposes liability for the conduct itself—not the motive behind it.

Who Is Protected by the DTPA?

To bring a DTPA claim, the plaintiff must be a “consumer” under the statute. In real estate transactions, a consumer is anyone who seeks or acquires real property for personal, family, or household use. This generally includes:

  • Homebuyers
  • Tenants in residential lease transactions
  • Small investors in residential properties

However, the DTPA may not apply in large commercial or industrial real estate purchases unless the transaction falls below the statutory threshold (currently $500,000 or $1 million depending on waiver and representation).

Prohibited Conduct Under the DTPA

Common real estate misrepresentations that violate the DTPA include:

  • Falsely stating that a home is free from defects
  • Failing to disclose flooding or foundation issues
  • Advertising false square footage or lot size
  • Misleading a buyer about zoning or building restrictions
  • Recommending unqualified inspectors or appraisers

Even silence or omissions may violate the DTPA when there is a duty to speak, such as when the seller knows of a hidden defect.

Agent and Broker Liability Under the DTPA

Texas courts have consistently held that real estate agents and brokers are subject to the DTPA when they misrepresent property conditions, provide incorrect information, or fail to disclose facts they knew or should have known.

In Miller v. Keyser, 90 S.W.3d 712 (Tex. 2002), a sales agent was held personally liable under the DTPA for telling homebuyers they could build a fence within an easement, which was later prohibited. The Court held that the agent’s conduct, not his intent, was sufficient to support liability.

DTPA Remedies

The DTPA allows for a range of powerful remedies, including:

  • Economic damages: The difference in value between what was promised and what was delivered
  • Additional damages: Up to three times the actual damages if the defendant acted knowingly or intentionally
  • Attorney’s fees: Reasonable and necessary fees for a prevailing consumer
  • Injunctive relief: Orders to undo or prohibit certain actions

These remedies make the DTPA especially useful for buyers who discover misrepresentations after the sale closes and need leverage to resolve the dispute.

Statutory Deadlines and Notice Requirements

A consumer must bring a DTPA claim within two years of the date the deceptive act occurred—or from when the consumer discovered, or should have discovered, the act. This is known as the “discovery rule.”

Before filing suit, the DTPA also requires a 60-day pre-suit notice, which must detail the complaint and damages sought. This gives the defendant an opportunity to offer settlement and may limit the damages if accepted.

DTPA Waivers in Real Estate Transactions

In limited cases, parties can waive DTPA protections. To be enforceable, a waiver must:

  • Be in writing and signed by the consumer
  • Be clear and conspicuous
  • Be part of a transaction over $500,000
  • Be executed by a knowledgeable consumer represented by legal counsel

These waivers are rare in residential transactions and often challenged in court. If fraud is proven, the waiver may be invalidated.

Limitations of the DTPA

While powerful, the DTPA is not a catch-all remedy. It may not apply if:

  • The transaction is strictly commercial and over $1 million with proper disclaimers
  • The plaintiff is not a “consumer” under the statute
  • The deceptive conduct is based solely on future performance or opinion

Nonetheless, many plaintiffs plead both DTPA and common law fraud/negligent misrepresentation in tandem to maximize potential recovery.

Summary

The Texas Deceptive Trade Practices Act offers real estate buyers a powerful remedy when they are misled. Unlike common law fraud, it does not require proof of intent and allows recovery of attorney’s fees and treble damages in some cases. Agents, brokers, and sellers who fail to disclose material facts or make false statements are all potentially liable under the DTPA.

In the next article, we’ll compare the most common misrepresentation-related claims in Texas real estate law—DTPA, fraud, and negligent misrepresentation—and break down when and why to use each one.

Next: Comparing DTPA, Fraud, and Negligent Misrepresentation