Texas Real Estate Sales Agent ExamProperty DisclosuresHard
A seller completes the Seller's Disclosure Notice and intentionally omits a known structural defect in the foundation. The buyer purchases the home, and the defect is discovered months later. Under what legal principle could the buyer seek recourse against the seller?
- ANegligent omission, only if the seller was unaware but should have known.
- BCaveat Emptor, as the buyer had an opportunity for inspection.
- CFraudulent misrepresentation, due to intentional concealment of a material fact.
- DBreach of warranty, as the seller implicitly guaranteed the home's condition.
Show answer & explanationAnswer & explanation
Correct answer: C. Fraudulent misrepresentation, due to intentional concealment of a material fact.
Intentionally omitting a known material defect on the Seller's Disclosure Notice constitutes fraudulent misrepresentation. This allows the buyer to seek recourse, as the seller made a false statement (by omission) of a material fact with intent to deceive.
Why the other options are wrong
- A. Negligent omission involves carelessness; the scenario specifies 'intentionally omits,' which points to fraud, not negligence.
- B. Caveat Emptor ('buyer beware') does not protect a seller who has intentionally concealed or misrepresented a material fact.
- D. There is no implied warranty of habitability in Texas for existing homes, and the Seller's Disclosure Notice explicitly states it is not a warranty.
Fraudulent Misrepresentation
A false statement of a material fact, made with intent to deceive, upon which another party relies to their detriment.
- Involves an intentional act (false statement or concealment).
- The misrepresentation must be of a material fact.
- The intent is to induce another party to act.
- The relying party suffers damages as a result.
Memory trick: Disclosure done wrong, buyer's rights are strong.