Chapter 4- Texas Deceptive Trade Practices the Consumer

Chapter 4- Texas Deceptive Trade Practices & the Consumer Protection Act Flashcards General Information and Notice to a Buyer (TAR 1506).This form does a great job of educating buyers by pointing out problems that could occur on any property but not specifically to the areas where the buyers are looking. But still, it covers a ton of scenarios that are possible in residential real estate.

Knowingly: DefinedUnder the DTPA, knowingly means actual awareness at

the time of the act or practice in complaint, of the falsity, deception, or unfairness of the act or practice giving rise to the consumer's claim.In the event of a breach of an express or implied warranty, "knowingly" means actual awareness of the act, practice, condition, defect, or failure constituting the breach of warranty. It's important to note that actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.Protect YourselfThe license holder would have to prove that they gave the information in writing to the consumer prior to the closing of the sale.ComminglingMixing a client's funds with an agent's personal funds is known as and is illegal.Four Roles Defined-We defined the four roles that the general public plays in a real estate transaction.

Principal: A major party to a real estate transaction (buyer,

seller, landlord, tenant) or an individual who authorizes an agent to represent their interests as a client in a real estate

transactionClient: A person who has signed an agency

agreement with you as their agent, a.k.a your

principalCustomer: A person on the other side of the

transaction with whom the license holder does not have an

agency relationshipThird Party: Any person involved in a

real estate transaction who is not your client Stating your quoteAn act as simple as misquoting the square footage of a home could be a cause of action for a lawsuit under DTPA.This is why sales agents give the source of the information that they are giving to the customer or

client.Like this: "According to the appraisal district, the

square footage is ___." License at RiskSome of the infractions for which TREC may revoke or suspend an agent's license - that is, violations of license law which are also violations of the DTPA - are the

following:Material misrepresentation or failure to disclose

any known or latent property defectsDeceptive practices in

the marketing, selling, or offering of real propertyFalse promises made to the consumer through advertising or directly through the agentFailure to disclose which party is compensating the agent, or that more than one party is liable for compensation without the written consent of all parties involvedRequest or acceptance of an undisclosed compensation, a.k.a. accepting money from a client because they want you to do something illegalActing as agent and undisclosed principal in a transaction E&O ProtectionWhat does errors and omissions actually protect

against?Say you're the listing agent on a property: From

your knowledge, the property did not have termite damage.The seller marked that there was no damage in the

disclosure, and you didn't see any proof of damage on the property. A few months after closing, the buyer files a lawsuit against you for what was found to be termite damage.In this situation, errors and omissions would be the type of insurance to protect you.ViolationsHere are a few violations you should absolutely

avoid while working in real estate:

Conduct that constitutes dishonest dealings, bad faith, or untrustworthiness (1101.652(b)(2))Making a material misrepresentation or failing to disclose to a potential

purchaser any latent structural defect or any other defect known to the broker or sales agent. Latent structural defects and other defects do not refer to trivial or insignificant defects but refer to those defects that would be a significant factor to a reasonable and prudent purchaser in making a decision to purchase.Continued and flagrant course of misrepresentation or making of false promises through agents, salespersons, advertising, or otherwise.Failing to make clear to all parties in a transaction which party he is acting for, or receiving compensation from more than one party except with the full knowledge and consent of all parties.Accepting, receiving, or charging an undisclosed commission, rebate, or direct profit on expenditures made for a principalSoliciting, selling, or offering for sale real property under a scheme or program that constitutes a lottery or deceptive practice.Guaranteeing, authorizing, or permitting a person to guarantee that future profits will result from a resale of real property.Inducing or attempting to induce a party to a contract of sale or lease to break the contract for the purpose of substituting in lieu thereof a new contract.