DTPA AND REAL ESTATE IV: Failure to disclose material facts Section 17.46(b)(24)
Here is what the DTPA says about failing to disclose material facts:
(24) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed;
Texas Business & Commerce Code, Section 17.46(b)(24). For the entire laundry list under the DTPA, go to this link:
So how does this particular DTPA section of the laundry list apply to real estate? How about a real life example?
A couple bought a house in Meyerland near Braes Bayou. The seller indicated that the home had been flooded only one time in the 40 plus years he had lived there. He was 89 and a former preacher. The buyers purchased the house and were flooded during a storm. When the buyer made a claim on her flood policy, she learned that the home had flooded on other occasions that were not disclosed by the buyer. Had the buyers been aware at the time of the transaction of these other flood events, they would not have entered into the purchase and would have looked elsewhere. So this non-disclosure was material and was withheld to induce the buyers into the contract.
Even more astonishing, the seller and his 49 year old daughter were present with the realtor when the Sellers' Disclosure Notice was being filled out and specifically asked the realtor about disclosiing previous flooding. The daughter even had the previous claim files from the last flood event. But the realtor told them the events were to long ago to worry about. The realtor paid a substantial settlement.
Also, FEMA adds up flood events for a property and can condemn a property or deem that it has to be lifted up out of the flood plain, something done all over Houston.