Real Estate Fraud

In a very general sense, real estate fraud occurs when a party makes claims of fact about the property or terms of the transaction which are false. However fraud can also occur when a party fails to disclose relevant information about a property or the terms of a transaction. The party defrauded has to allege and prove that they would not have entered into the transaction but for the fraud and that they suffered damages as a result of the raud. In fact Texas has a statute which specifically addresses Real Estate Fraud.

Chapter 27 of the Texas Business & Commerce Code reads as follows:

BUSINESS & COMMERCE CODE

CHAPTER 27. FRAUD

§ 27.01. FRAUD IN REAL ESTATE AND STOCK

TRANSACTIONS.  (a) Fraud in a transaction involving real estate or

stock in a corporation or joint stock company consists of a

(1)  false representation of a past or existing

material fact, when the false representation is

(A)  made to a person for the purpose of inducing

that person to enter into a contract;  and

(B)  relied on by that person in entering into

that contract;  or

(2)  false promise to do an act, when the false promise

is

(A)  material;

(B)  made with the intention of not fulfilling it;

(C)  made to a person for the purpose of inducing

that person to enter into a contract;  and

(D)  relied on by that person in entering into

that contract.

(b)  A person who makes a false representation or false

promise commits the fraud described in Subsection (a) of this

section and is liable to the person defrauded for actual damages.

(c)  A person who makes a false representation or false

promise with actual awareness of the falsity thereof commits the

fraud described in Subsection (a) of this section and is liable to

the person defrauded for exemplary damages.  Actual awareness may

be inferred where objective manifestations indicate that a person

acted with actual awareness.

(d)  A person who (1) has actual awareness of the falsity of a

representation or promise made by another person and (2) fails to

disclose the falsity of the representation or promise to the person

defrauded, and (3) benefits from the false representation or

promise commits the fraud described in Subsection (a) of this

section and is liable to the person defrauded for exemplary

damages.  Actual awareness may be inferred where objective

manifestations indicate that a person acted with actual awareness.

(e)  Any person who violates the provisions of this section

shall be liable to the person defrauded for reasonable and

necessary attorney’s fees, expert witness fees, costs for copies of

depositions, and costs of court.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s