Buyer Rights After Undisclosed Property Issues

Purchasing a home or commercial property is a major investment, and buyers rely on sellers to disclose known defects. But what happens when you move in and discover issues that were never disclosed—such as foundation problems, water damage, or zoning violations?

In Texas, real estate transactions are governed by both statutory and common law principles that protect buyers from fraudulent or negligent nondisclosure. If a seller failed to disclose material defects, you may have legal options to seek compensation or even rescind the purchase.

1. Understanding Texas Disclosure Laws

Under Texas Property Code Section 5.008, most sellers of residential property are required to provide a Seller's Disclosure Notice, which lists known material defects affecting the property. While this form does not require a seller to conduct inspections, they must disclose:

• Structural issues (e.g., foundation cracks, roof leaks)
• Plumbing, electrical, or HVAC defects
• Past flooding or drainage problems
• Environmental hazards (e.g., asbestos, mold)
• Zoning or legal restrictions impacting property use

Commercial real estate transactions, on the other hand, often operate under the principle of “buyer beware” (caveat emptor), meaning due diligence is key. However, sellers cannot actively conceal defects or misrepresent the condition of the property.

2. Legal Claims for Undisclosed Issues

Buyers may have several legal avenues to hold a seller accountable for failing to disclose known property defects:

• Fraudulent Misrepresentation – If the seller knowingly concealed or provided false information about a defect, you may sue for fraud.
• Negligent Misrepresentation – If a seller made unintentional yet misleading statements that caused you financial harm, they could still be liable.
• Breach of Contract – If your purchase agreement included specific warranties or disclosures that turned out to be false, you may have a contract claim.
• Texas Deceptive Trade Practices Act (DTPA) – This consumer protection law allows buyers to sue for damages if a seller engaged in deceptive practices, such as failing to disclose known defects.

3. Steps to Take If You Discover Undisclosed Issues

If you suspect that material property defects were not disclosed, follow these steps:

·       Review Your Sales Contract & Disclosure Form – Check whether the defect should have been disclosed under Texas law.

·        Gather Evidence – Take photos, obtain inspection reports, and document repair costs.

·        Communicate with the Seller – Sometimes, issues can be resolved directly without legal action.

·        Consult an Attorney – If the seller refuses to take responsibility, legal intervention may be necessary.

4. Potential Remedies for Buyers

If legal action becomes necessary, Texas law offers several remedies for buyers affected by nondisclosure:

• Repair Costs Compensation – Sellers may be required to pay for necessary repairs.
• Rescission of the Sale – In cases of significant fraud, courts may allow buyers to cancel the sale and recover their investment.
• DTPA Damages – If deception is proven, buyers may recover economic damages, attorney's fees, and, in some cases, additional penalties.

Discovering undisclosed property defects can be stressful, but Texas law provides protections for buyers facing seller misrepresentation. If you're dealing with undisclosed issues, knowing your rights and legal options is crucial to protecting your investment.

Have questions about your legal rights as a property buyer? Explore our resources or reach out to learn more about how The Keller Firm supports buyers in navigating real estate disputes.