As a Real Estate Attorney in San Antonio, Tx, I am
experienced at litigating real estate fraud and nondisclosure suits arising
from the purchase, sale, transfer and exchange of real property.
Fraud in a Real Estate Transaction
(irrespective of whether the real property in question is residential or
commercial), occurs when:
- there is a false statement or material misrepresentation of facts related to real property (whether made by the Seller or his agent). In some cases, it is not even necessary for the person to know that the statement is false at the time it is made;
- concealment or nondisclosure of material facts related to real property; and/or
- there is a breach of fiduciary duty by a real estate agent, real estate broker, title company, escrow officer or attorney. The agent may represent either the Buyer or the Seller.
We file/prosecute and defend claims and
lawsuits based on fraud or concealment in a real estate transaction, including
cases involving a Seller's non-disclosure of facts (the existence of an
undisclosed easement, prior problems or repairs, prior flooding, title clouds,
competing ownership claims, size/acreage discrepancies, etc.). We also handle
and defend cases against real estate professionals (brokers and agents)
concerning fraud, professional misconduct and breaches of fiduciary duty.
When evaluating the feasibility of a real
estate fraud case, several factors are considered, including the following:
1) Was the Fraudulent
Activity “Affirmative,” or a “Misrepresentation by Non-Disclosure?” Affirmative fraud
generally arises when a seller or his realtor knowingly makes a false statement
or misrepresentation of material fact with an intent that the Buyer relies on
the false statement. By contrast, Fraud by Non-Disclosure (also referred to as “fraudulent
concealment”) generally occurs when the Seller or his real estate agent fails
to disclose a material fact about the property, including known defects and
title issues, with an intent to effect the Buyer’s decision concerning whether
to purchase the property, and at what price.
2) Was the Seller's Real Estate Agent Aware of the
Fraud? If a seller's broker has knowledge of material facts, not known to the
buyer, the seller's broker is under a duty of disclosure and may be held liable
for mere nondisclosure since his/her conduct in the transaction amounts to a
representation of the nonexistence of the facts, which he has failed to
disclose.
3) Is the Real Estate Transaction Implicated by "As-Is"
or Other Contractual Nuances? Sellers and their real estate brokers are always
under a duty to disclose concealed or known material facts that are not known
or observable by the buyer. A property sold "As-Is" may limit
the Seller’s disclosure duties, but an "As Is" provision will not
relieve the Seller or Seller's Agent fraud liability arising from purposeful
nondisclosure or concealment.
4) Does the Fraudster have Insurance or the Resources to Satisfy a Judgment? A sometimes sad and frequently frustrating reality of litigation (particularly unfortunate in lawsuits arising from fraud) is that the costs and burdens of filing a lawsuit must be economically feasible. In other words, before pursuing a claim, the claimant/fraud victim should have reasonable assurances that the opposing party can pay money to settle the claim or satisfy a Judgment in the event that the case goes to trial. In instances where the party engaging in fraud has no resources, no non-exempt assets, and no insurance policy available to satisfy a claim, it frequently doesn't make "financial sense" to spend the time, money and energy to pursue a civil lawsuit for money damages. While alternate remedies may exist when the fraudster lacks resources (rescission of sale, criminal charges, etc.), the victim sometimes has to make a tough decision of whether to risk "throwing good money after bad." However, where the party engaging in fraud has a professional liability insurance policy, financial resources and/or non-exempt property, the "economically feasible" consideration is more easily resolved.
