Certain Claims Against Realtors Not Subject To Deceptive Trade Practices Act

The Texas Deceptive Trade Practices Act (the “DTPA”) is a powerful statute that provides consumers of goods or services with relief for certain acts by the Sellers of such goods.  Its express purpose is “protecting “consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty,” and providing “efficient and economical procedures to secure such protection.”

The DTPA is a favorite of Texas Plaintiff’s lawyers because it provides for recovery considerable damages over-and-above the economic damages sustained by a consumer.  However, the DTPA does not apply to all claims involving consumers or the purchase of goods and services. In fact, there are numerous exemptions to the DTPA’s application.

One important exemption relates to claims against real estate professionals. In short, not every act of negligence, breach of contract or violation of law by a real estate licensee subjects the professional to liability under the DTPA.

Section 17.49(i) of the DTPA provides:

(i) Nothing in this subchapter shall apply to a claim against a person licensed as a broker or salesperson under Chapter 1101, Occupations Code, arising from an act or omission by the person while acting as a broker or salesperson.

If it seems like Section 17.49(i) gives licensees a free pass from the “teeth” of this consumer protection law, think again. Here’s the exception to the exception:

This exemption does not apply to:

(1) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion;
(2) a failure to disclose information in violation of Section 17.46(b)(24); or
(3) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.

In short, the DTPA will apply to real estate professionals who act purposely or fraudulently.  In addition, licensees acting as principals are not shielded from liability under the DTPA.

If you are involved in a legal dispute in which fraud or other wrongful conduct of a real estate licensee is alleged, you should contact an experienced attorney.