Texas considers exempting real estate brokers from its consumer protection statute

by Richard Alderman

For most consumers, their home is the most expensive purchase they will make. It is also is the transaction with the greatest potential for problems.  A consumer who is mislead or deceived with respect to the purchase of a home is likely to suffer substantial economic harm. It is a good thing that in Texas, real estate brokers, agents and salespersons are subject to the Texas Deceptive Trade Practices Act [DTPA]. The DTPA imposes liability for such wrongful conduct, allows recovery of economic damages, damages for mental anguish, and possible punitive damages, and mandates attorney’s fees to a prevailing consumer. At least this is the law today.

The Texas Legislature currently is giving serious consideration to a bill to exempt real estate brokers, agents and salespersons from liability under the DTPA. Why?  Because they are sued too much. Apparently, the fact that consumers successfully use the DTPA against false, deceptive and misleading conduct in connection with the single largest purchase they make requires we no longer apply that law.  What’s good for business is good for Texas.