DTP and Consumer Protection Part I

Question 1

What is fraud?

Answer 1

An act of deception which was done deliberately by someone to get an unfair advantage over someone else.

Question 2

Describe misrepresentation.

Answer 2

Misrepresentation is created when a licensee made a misleading statement or a false statement that was accepted as fact from a customer or client and the person was damaged by relying on that information.

Question 3

What federal law watches over business to make sure that fraud and misrepresentation do not take place as companies provide products and services?

Answer 3

Deceptive Trade Practices Act

Question 4

Why do the DTPA and the Texas Real Estate Commission exist?

Answer 4

To Protect the Public

Question 5

Actions considered a violation of Section 17.46 of the DTPA law are known as what?

Answer 5

Laundry List

Question 6

Which item in the complete laundry list are licensees more likely to violate than any other?

Answer 6

Disparaging the goods, services, or business of another by false or misleading representation of facts

Question 7

Some sellers will not sell a property and most lenders will not sell a foreclosure for fear of being sued unless the buyer will sign a form known as what?

Answer 7

Waiver of Rights under the DTPA

Question 8

Explain how a licensee could violate DTPA by just referring a particular service person to a client.

Answer 8

If the agent recommended a particular service person and did not simply let the consumer pick from a list of possible companies and that repair person furtherdamages the property, the agent could be held liable as well.

Question 9

Under DTPA, how much warning time must the plaintiff give the potential defendant about the intention to file and an outline of the complaint and damages?

Answer 9

60 Days

Question 10

There are some exemptions from prohibition against waiver under Section 17.49 (f) to the DTPA law as long as there is a written contract and it meets the certain requirements. List two of those requirements.

Answer 10

The contract relates to a transaction, a project, or a set of transactions related to the same project involving total consideration by the consumer of more than $100,000.
In negotiating the contract the consumer is represented by legal counsel who is not directly or indirectly identified, suggested, or selected by the defendant or an agent of the defendant.
The contract does not involve the consumer’s residence.
All transactions, whether written or not, that have consideration that exceeds $500,000.

Question 11

DTPA allows that the winning consumer can recover what?

Answer 11

Economic damages, attorney, fees, and court costs

Question 12

If an agent has no knowledge of a material defect to the property, how much can a court award in the way of damages?

Answer 12

Nothing, the agent will not be held responsible for material defects he or she was unaware of

Question 13

The Texas Real Estate Commission has a recovery fund for what purpose?

Answer 13

Damages to someone who wins a case against a licensee in a court of law and the licensee does not have the funds to pay the judgment.

Question 14

What is the statute of limitations under the Deceptive Trade Practices Act?

Answer 14

If a consumer does not file the lawsuit in a timely manner, then the lawsuit cannot be filed. The time frame is two years from the event or the discovery of the event.

Question 15

What punishment can a court not bring to bear on a licensee?

Answer 15

The court cannot take away the license of the real estate licensee.

Question 16

How much money can a licensee receive from the Recovery Fund?

Answer 16

A licensee is not eligible to receive any funds from the Recovery Fund.

Question 17

What does the seller mean when listing a property “as is”?

Answer 17

The seller is not going to pay for or make any improvements.

Question 18

In real estate, what is the seller required to tell the buyer about the property?

Answer 18

It’s Condition

Question 19

List two tests for disclosure outlined by the courts.

Answer 19

The seller must not obstruct the buyer’s attempts to inspect the property
The “as is” clause must be an important element of the contract, not an incidental provision
The buyer and seller must not be in a relatively unequal bargaining position
All known defects must be disclosed by the seller

Question 20

Define commission and give an example of an act of commission that could cause misrepresentation.

Answer 20

Commission means that the licensee did something to cause misrepresentation such as telling the buyer the home had 3,000 square feet when it actually had 2,000

Question 21

Fraud

Answer 21

is an act of deception which was done deliberately by someone to get an unfair advantage over someone else.

Question 22

Misrepresentation

Answer 22

is created when a licensee made a misleading statement or a false statement that was accepted as fact from a customer or client and the person was damaged by relying on that information.

Question 23

Deceptive Trade Practices Act

Answer 23

is a federal law that watches over business, not just real estate, to make sure that fraud and misrepresentation do not take place as companies provide products and services.

Question 24

Texas Deceptive Trade Practices Act (DTPA)

Answer 24

is the Consumer Law for Texas consumers who have been the victim of realtor deception, abuse, fraud, or other realtor injury or injury from the seller or inspector.

was created to protect Consumers.

Potential violations of DTPA are called a laundry list and are located in Section 17.46 of the law.

Question 25

Waiver of Rights under the DTPA

Answer 25

Some sellers will not sell a property and most lenders will not sell a foreclosure unless the buyer signs a waiver to sue known as the Waiver of Rights under the DTPA.

Question 26

Under DTPA

Answer 26

the plaintiff must give the potential defendant 60 days warning about the intention to file and an outline of the complaint and damages; both economic damages and mental anguish.

Question 27

DTPA Allows that the winning consumer

Answer 27

can recover his or her economic damages, attorney, fees, and court costs.

The judge or jury can also award an amount in excess of the costs mentioned above for mental anguish if the act was performed knowingly or intentionally. The plaintiff may receive no more than three times the economic damages for mental anguish if the act was performed knowingly and/or intentionally.

Question 28

The Texas Real Estate Commission has a recovery fund

Answer 28

that is for the purpose of paying damages to someone who wins a case against a licensee in a court of law and the licensee does not have the funds to pay the judgment.

The recovery fund is not for licensees to receive anything.

Question 29

There is a statute of limitations under the Deceptive Trade Practices Act

Answer 29

The time frame is two years from the event or the discovery of the event.

Question 30

Commission

Answer 30

is from the word commit. It means that the licensee did something to cause misrepresentation such as telling the buyer the home had 3,000 square feet when it actually had 2,000.

Question 31

Ommission

Answer 31

is from the word omit as in the licensee failed or omitted doing something that caused misrepresentation. Such as failing to tell the buyer that the home had had a previous fire.