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KHOU in Houston reported that a Houston real estate and title company widely engaged in fraud and was sued by Harris County.  According to the report, Patriot Title defrauded customers by refusing to release client escrow monies, conducted real estate transactions with forged deeds, and sold illusory properties to unsuspecting purchasers.

As a Houston Real Estate and Fraud attorney, I see this fact pattern repeatedly and it is heart breaking to clients.  Most have saved and waited their whole life to buy the home of their dreams and are shocked that their money or property has been stolen.  “Ripped off” doesn’t describe their reaction.  I would substitute the word “betrayed”.

Unfortunately, fraud is rampant in Houston and Texas real estate and construction transactions whether the client is considering the purchase of a residential home, commercial property, or even complex transactions.  It is everywhere.

So, how do you protect yourself? Here are a few critical recommendations from an experienced Houston Real Estate and Fraud Attorney:

1. Check out the track record of the party on the other side of the transaction.

This sounds obvious but is usually overlooked. I cannot tell you how many clients regret never checking out something as simple as the Better Business Bureau (BBB) rating. In most cases, it will identify the culprits as being unaccredited and having a failing score (C, D, or F).

However, sometimes even the BBB is not accurate, and the client can still get stung.  In any large transaction whether it is the purchase of your first residential property or a larger transaction, best to have a professional run a quick and inexpensive background check to see if there is any negative information and, particularly, prior lawsuits.  That will almost always do the trick and avoid the client getting into a problem in the first place.

2. Have an experienced Texas Real Estate Lawyer review the real estate contract.

This may sound like overkill, but it is not.  The Moster Law Firm is a hospital – of sorts – for Houston real estate and construction contracts gone wrong. Typically, there is a provision or two that makes the purchase unaffordable of which the client is unaware.  A prior legal contract review would easily have identified the problem had it been conducted.  Keep in mind that you can negotiate for the terms you want and are not bound by the seller’s contract unless you sign.  If you do, you are most assuredly “stuck” and may need to pay an attorney to get you out.  That’s when it gets expensive.

3. Don’t fall for the seller’s alleged excellent reputation.

This is an easy mistake to make.  I have represented clients who signed contracts with so-called “elite builders” to construct high end multimillion dollar homes.  Given the flashy website and reviews, they rarely check the fine print.  That’s when things go bad.  Very bad.

As they say in life and law, “the devil is in the detail” and it sure is when it comes to Texas real estate and construction contracts.  I have seen egregious terms which rob clients of their legal rights, wipe out warranties, and add events of default for simply raising concerns about defects.  One of the worst is when you see language which states that a builder is held to the “lowest standard of care” for construction in Texas.  You heard that right!  And it applied to a top builder which entered into a recent contract with one of my clients.

4. Don’t give away your rights to sue for Real Estate Fraud.

Hard to believe, but the Texas Supreme Court will allow builders to put language in real estate contracts which take away the legal rights of purchasers to sue for fraud.  The Court has held that this is entirely valid so long as the language is inconspicuous which means that it is either in bold print or a larger font.  Since most purchasers never read the contract in detail, this can easily be missed.  Moreover, only a trained lawyer would spot this legal “sink hole”.

The above points just touch the tip of the fraud iceberg.  My recommendation is to consult an experienced Houston real estate and fraud attorney before signing on the dotted line.

At the Moster Law Firm we are here to help.  Give us a call for a complimentary consultation.

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