Real estate litigation can become expensive, particularly when a dispute involves valuable property, complex ownership questions, or a commercial agreement. For investors and business owners, one of the first financial questions is whether the opposing party may ultimately be responsible for attorney's fees. 

In Texas, the answer depends on the legal claims involved, the terms of any applicable contract, and the requirements for recovering fees. 

Winning a real estate lawsuit does not automatically mean the other party must pay your attorney's fees. Understanding when fee recovery is available can help property owners evaluate the financial considerations surrounding litigation. 

Does the Losing Party Have to Pay Attorney's Fees in Texas?

Texas generally follows the American Rule, which means each party is responsible for its own attorney's fees unless a statute or enforceable contract authorizes recovery. 

This rule applies even when one party prevails in litigation. A successful plaintiff or defendant cannot assume that the court will order the opposing party to reimburse legal expenses. 

For example, an investor who successfully defends an ownership claim may still be responsible for attorney's fees if no applicable law or contractual provision permits recovery. 

The starting point is identifying a valid legal basis for shifting those fees to another party. 

When Does Texas Law Allow Recovery of Attorney's Fees?

One of the primary statutory provisions governing attorney's fees is Texas Civil Practice and Remedies Code § 38.001. 

The statute permits recovery of reasonable attorney's fees for certain types of valid claims, including claims involving oral or written contracts. 

In real estate litigation, this may become relevant when a dispute involves a purchase agreement, commercial lease, or another contract governing the parties' obligations. 

However, the existence of a contract dispute does not guarantee an award. The party requesting fees must establish that the statutory requirements apply, including the requirements governing the underlying claim and the party from whom fees are sought. 

Section 38.001 also contains exceptions for certain organizations and entities. Those limitations should be evaluated before assuming statutory fee recovery is available. 

Presentment and the 30-Day Requirement

Under Texas Civil Practice and Remedies Code § 38.002, a party seeking fees under Chapter 38 must satisfy specific procedural requirements. 

The claimant must be represented by an attorney and must present the claim to the opposing party or an authorized agent. Attorney's fees are recoverable only if the opposing party does not tender payment of the just amount owed within 30 days after presentment.  

These requirements can affect whether attorney's fees are recoverable, even when the underlying contract claim is otherwise valid. 

For investors involved in a real estate contract dispute, the timing and substance of a demand may therefore matter to the potential recovery of legal fees. 

Can a Real Estate Contract Require the Other Party to Pay Attorney's Fees?

Yes. Some real estate agreements contain provisions addressing attorney's fees when a dispute arises. 

Commercial leases, purchase agreements, and other negotiated contracts may specify when fees can be recovered and which party is entitled to seek them. 

A contract might, for example, allow the prevailing party in an action to enforce the agreement to recover reasonable attorney's fees. 

The language of the provision matters. A contractual fee clause may establish a recovery standard that differs from the requirements of Chapter 38. 

The Texas Supreme Court addressed this distinction in Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). The case involved a commercial lease with a prevailing-party fee provision, and the Court explained that contractual language can establish a different basis for fee recovery than the statute. 

Before determining whether fees may be recovered in a real estate contract dispute, it is important to review the actual agreement and the claims asserted. 

Can a Defendant Recover Attorney's Fees After Successfully Defending a Lawsuit?

A successful defense does not automatically create a right to attorney's fees. 

Under Chapter 38, a party generally must establish the requirements for recovery on a qualifying claim. Simply defeating another party's contract claim does not, by itself, satisfy those requirements. 

A defendant may nevertheless have a basis to seek fees under an applicable contractual prevailing-party provision or another statute. 

A defendant who asserts and succeeds on an independent counterclaim may also have a potential basis for recovery, depending on the nature of the counterclaim and the applicable law. 

For example, if a commercial property owner is sued for breach of contract, the outcome of the defense and the wording of the agreement's fee provision may both affect whether the owner can seek reimbursement. 

The distinction between successfully defending a claim and prevailing on an affirmative claim can be significant when evaluating attorney's fees. 

Are Attorney's Fees Recoverable in Texas Title and Boundary Disputes? 

Title and ownership litigation presents additional considerations because not every property dispute arises from an enforceable contract. 

In a lawsuit involving competing ownership claims, a party may seek a determination of title through a trespass-to-try-title action or pursue other relief appropriate to the dispute. 

A title dispute does not automatically support an attorney's fee award merely because one party establishes superior ownership rights. 

The specific causes of action and any independent statutory or contractual basis for fees must be examined. 

Declaratory Judgments and Property Boundary Disputes 

The Texas Uniform Declaratory Judgments Act provides a potential basis for attorney's fees in certain proceedings. 

Under Texas Civil Practice and Remedies Code § 37.009, a court may award reasonable and necessary attorney's fees that are equitable and just. 

However, requesting a declaratory judgment does not automatically make fees recoverable in every real estate title case. 

Texas law distinguishes between disputes that properly fall within the Declaratory Judgments Act and claims that must be resolved through other legal procedures. 

Importantly, § 37.004(c) expressly permits a declaratory judgment proceeding when the sole issue concerning title is the determination of the proper boundary line between adjoining properties. 

This provision can be particularly relevant in disputes involving neighboring commercial tracts or investment properties. 

Even when the Declaratory Judgments Act applies, a fee award remains subject to the court's determination of what is equitable and just. Recovery is not automatic, and a party does not necessarily have to prevail on every issue to be considered for an award under that provision. 

How Do Texas Courts Determine Whether Attorney's Fees Are Reasonable? 

Establishing a legal right to recover attorney's fees is only part of the analysis. 

The party seeking fees must also provide sufficient evidence supporting the amount requested. 

In Rohrmoos Venture v. UTSW DVA Healthcare, LLP, the Texas Supreme Court emphasized the need for evidence of reasonable hours worked and reasonable hourly rates. 

The Court explained that a fee request generally requires sufficient detail about the legal services performed to allow the factfinder to evaluate the reasonableness and necessity of the requested amount. 

A large legal bill, standing alone, does not establish that the entire amount is recoverable. 

In complex real estate litigation, attorney's fee evidence may involve substantial work relating to document review, discovery, motion practice, expert issues, and trial preparation. The recoverability of those expenses depends on the applicable fee authority and the evidence supporting the request. 

What Happens When Only Some Claims Allow Attorney's Fees? 

Real estate lawsuits frequently involve multiple causes of action. 

A dispute may include a contract claim alongside claims concerning ownership, fraud, or other property-related issues. 

When some claims permit recovery of attorney's fees and others do not, Texas law generally requires segregation of fees attributable to recoverable and nonrecoverable claims. 

The Texas Supreme Court addressed this requirement in Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006). 

There is an important qualification: certain legal services may advance both recoverable and non-recoverable claims in a way that makes the work inseparable. Whether an exception to segregation applies depends on the services performed and the relationship between the claims. 

For investors involved in litigation with overlapping contract and title issues, this can affect the amount of attorney's fees ultimately awarded. 

What Should Real Estate Investors Consider Before Pursuing Attorney's Fees? 

Attorney's fee recovery can be an important financial consideration in a substantial real estate dispute, but it should be evaluated in the context of the specific claims and agreements involved. 

A contractual fee provision may affect litigation exposure for both parties. Statutory requirements can influence the availability of recovery, and the amount ultimately awarded may differ from the total fees incurred. 

Investors should also consider that an award of attorney's fees does not necessarily mean those amounts will be collected from the opposing party. 

Understanding the potential for fee recovery early in a dispute can help property owners make informed decisions about litigation strategy and financial exposure. 

Discuss Your Texas Real Estate Litigation Matter With The Keller Firm 

Disputes involving commercial property, real estate contracts, and competing ownership claims can create significant financial consequences for investors and business owners. 

The Keller Firm represents clients in real estate litigation throughout Texas. Our firm evaluates the legal issues affecting property interests, including the potential availability of attorney's fees under applicable contracts and Texas law. 

If you are involved in a real estate dispute, contact The Keller Firm to discuss your situation. 

Legal Sources and References

• Texas Civil Practice and Remedies Code, Chapter 38

• Texas Civil Practice and Remedies Code, Chapter 37

• Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019)

• Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006)

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