In Texas, real estate fraud occurs when someone intentionally uses deception or false information to unlawfully obtain money, property, or other financial benefits in connection with a real estate transaction. This misconduct may violate both civil and criminal laws, and victims often suffer substantial financial losses.
Defining Real Estate Fraud in Texas
Under Texas law, real estate fraud generally falls under the broader category of “fraud,” which involves making a false representation with the intent that another person will rely on it. Fraud in real estate can occur at any stage of a transaction, including listing, negotiation, financing, closing, or post-sale period. These issues often require a detailed understanding of Texas real estate law to resolve
Common laws covering real estate fraud in Texas include:
- Texas Business & Commerce Code § 27.01 governs fraud in real estate and stock transactions.
- The Texas Deceptive Trade Practices Act (DTPA) protects consumers from false, misleading, or deceptive practices.
- Criminal statutes may apply when the conduct rises to criminal intent.
To prove real estate fraud, a victim must generally show that the wrongdoer (1) made a false material representation, (2) intended for the victim to rely on it, and (3) caused damages as a result.
Common Types of Real Estate Fraud in Texas
Real estate fraud can take many forms. Some of the most common schemes include:
- Misrepresenting property condition – Sellers or agents may hide defects, falsify inspection reports, or fail to disclose known issues such as foundation damage, flooding history, or mold.
- Title fraud – This occurs when a person forges signatures, transfers property without authorization, or uses fraudulent deeds to steal ownership or equity.
- Mortgage or lending fraud – Fraud may involve falsifying loan applications, inflating appraisals, or steering borrowers into unfavorable or predatory loan products.
- Foreclosure rescue scams – Fraudulent companies target homeowners in financial distress by promising help, but instead take title to the property or collect fees without providing assistance.
- Investment and rental scams – Fraudsters may collect deposits for properties they do not own, misrepresent rental income opportunities, or run Ponzi-style development schemes.
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Identifying Real Estate Fraud in Texas
What Damages Can You Recover in a Fraud Claim?
If you are the victim of real estate fraud in Texas, you may be entitled to pursue compensation through a civil lawsuit. The specific damages available depend on the type of fraud you experienced and other factors.
Common recoverable damages include:
- Money paid in reliance on fraudulent statements
- Lost equity or property value
- Costs of repairing undisclosed defects
- Expenses incurred to unwind or correct the fraudulent transaction
- Out-of-pocket costs, such as appraisal fees, inspection fees, or loan-related expenses
- The difference between the value a victim was promised and what they actually received. (Benefit-of-the-Bargain Damages)
- Consequential damages for the additional financial harm beyond the immediate transaction
- Attorney’s fees under certain statutes (such as DTPA or Texas Business & Commerce Code § 27.01)
An experienced attorney can help you understand the damages you’re entitled to during a confidential consultation.
Contact an Experienced Houston Real Estate Attorney for Help With a Fraud Claim
If you’ve been a victim of real estate fraud, you may have the right to take legal action against the responsible party. At Porter Law Firm, an attorney can help assess your legal options, preserve your rights, and pursue compensation for your losses. Contact us today to schedule a confidential consultation to learn more.