Houston Team Secures Defense Win Before Trial for Claims Related to a Real Estate Purchase

Real Estate Purchase and Undisclosed History of Issues

The case began when the Plaintiff purchased a home in March of 2024. The home flooded in May of 2024, at which time Plaintiff discovered the property had a history of prior flooding (including a determination of substantial damage following Hurricane Harvey) that was not disclosed by the seller before closing.

Plaintiff sued multiple defendants, including our clients, Declaration Title Company and its employees, alleging Declaration Title (i) failed to provide Seller’s Disclosures; (ii) failed to secure title insurance insuring “marketable title”; and (iii) made material misrepresentations in violation of the Texas Deceptive Trade Practices Act.

Title Company Cannot be Held Liable for Seller Non-Disclosures

Plaintiff alleged Declaration Title failed to deliver clear and marketable title. The court found no title defect existed—Plaintiff holds fee simple title via a General Warranty Deed, and no cloud on title was shown. Plaintiff also alleged Declaration Title failed to ensure he received seller’s disclosure notices. Under Texas Property Code § 5.008, the duty to provide disclosures falls on the seller, not the title company.

Regarding the breach of contract claim, the court found that no contract existed between Plaintiff and Declaration Title. Declaration Title merely facilitated the closing. Moreover, Plaintiff did receive the title insurance contemplated by the purchase agreement.

With respect to the breach of implied covenant of good faith and fair dealing, this duty arises from the insurer-insured relationship. Declaration Title is not an insurer, so the claim was inapplicable.

As far as the DTPA and Texas Insurance Code Violations, Plaintiff failed to identify any specific statutory provision violated or any actual discrepancy between the title policy and the contract requirements. The policy conformed to the contract’s requirements.