Key points
- The Seller’s Disclosure Notice covers conditions the seller actually knows about, including prior flooding, flood insurance claims and floodplain location.
- Statutory fraud under § 27.01 allows recovery of actual damages and attorney’s fees, and exemplary damages where the seller had actual awareness of the falsity.
- An “as is” clause doesn’t bar claims where the buyer was fraudulently induced to agree to it or the seller impaired the buyer’s inspection.
- Fraud claims generally must be filed within four years. DTPA claims generally within two.
What Texas sellers must disclose
Property Code § 5.008 requires a seller of residential property comprising not more than one dwelling unit to give the buyer a written notice of the property’s condition, subject to exemptions such as certain foreclosure sales, court-ordered transfers, and some transfers by fiduciaries administering estates. The notice covers the seller’s knowledge of:
- Structural, foundation and roof defects and repairs;
- Water penetration and previous flooding, flood insurance claims, FEMA assistance, and location in a floodplain or reservoir;
- Termite and wood-destroying insect damage and treatment;
- Plumbing, electrical, HVAC and septic conditions;
- Prior repairs, unpermitted additions and code violations; and
- Lawsuits, HOA matters, and other conditions that materially affect the property.
The seller isn’t required to inspect or disclose what they don’t know. The question in most cases is what the seller actually knew, and that’s what discovery is designed to uncover.
Claims available to buyers
| Claim | What you must show | What you may recover |
|---|---|---|
| Common-law fraud / fraud by nondisclosure | A knowing misrepresentation or concealment of a material fact the seller had a duty to disclose, and your reliance on it. | Actual damages, and exemplary damages on clear and convincing evidence. |
| Statutory real estate fraud (§ 27.01) | A false representation of a past or existing material fact made to induce you into the contract. | Actual damages and attorney’s fees, plus exemplary damages if the seller had actual awareness. |
| Negligent misrepresentation | False information supplied without reasonable care. | Out-of-pocket damages. |
| DTPA | A false, misleading or deceptive act listed in the statute, or an unconscionable action. | Economic damages, plus up to three times economic damages for knowing conduct, and attorney’s fees. |
“As is” clauses and inspections
Sellers routinely defend by pointing to the contract’s “as is” language and the buyer’s own inspection. Texas courts generally enforce “as is” clauses, but not where the buyer was induced to agree to the clause by fraudulent representations or concealment, or where the seller obstructed the inspection. Similarly, a buyer’s inspection doesn’t defeat a claim if the defect was concealed, for example by fresh paint over water stains, furniture placed over cracks, or a seller’s assurance that a problem had been “fixed.”
Just discovered a hidden defect?
Photograph everything, keep damaged materials, and get repair estimates. Then call us before making permanent repairs. A DTPA claim also requires written notice at least 60 days before suit.
Building a nondisclosure case
We gather the disclosure notice, the MLS listing and agent remarks, the inspection report, insurance claim histories, contractor and permit records, HOA records, neighbors’ accounts, and FEMA and flood-claim data to establish what the seller knew. Expert inspection and repair estimates prove the damages. Claims may also lie against agents and brokers who knew of the defect.
For sellers facing claims
We also defend sellers. Sellers who disclosed what they knew, or who genuinely didn’t know, have strong defenses, especially where the buyer had a professional inspection and agreed to purchase “as is.”