Texas Home Sellers: Why “After Closing” Is When Lawsuits Actually Begin

Texas Real EstateHome SellingLegal RiskSeller Disclosures
Written By Bill Ross

Most Texas home sellers think closing day is the end of the story. Legally, it often isn’t.

In Texas, buyers can sometimes sue sellers years after a transaction closes, depending on the legal theory involved. For example, many fraud and contract-based claims carry a four-year statute of limitations, while some consumer protection claims must be brought within two years.
That gap between moving out and being sued catches sellers off guard every year.

This article explains why buyers sue sellers after closing, what claims they use, and what buyers can recover if they win—in plain English.

Not to alarm.
But definitely to inform.

The core issue behind most seller lawsuits

Almost every post-closing lawsuit boils down to one allegation:

“The seller knew something material and didn’t tell us.”

Texas law does not require sellers to guarantee a perfect house.
But it does require honesty about known material conditions.

That’s where things go sideways.

The Seller’s Disclosure: not paperwork—evidence

Texas law requires many sellers of 1–4 family residential property to complete a Seller’s Disclosure Notice based on the seller’s actual knowledge and belief (Texas Property Code §5.008).

That form is not marketing.
It is evidence.

And in a lawsuit, it’s often Exhibit A.

Problems usually arise when sellers:

  • Guess instead of disclose

  • Minimize past issues

  • Assume “repaired” means “irrelevant”

  • Believe “as-is” means “immune”

  • Omit prior problems because they seem old or resolved

Those assumptions are exactly what buyer attorneys test.

The issues buyers sue over most often

These aren’t minor annoyances.
They’re expensive, emotionally charged, and easy to explain to a jury.

Water (the undisputed lawsuit champion)

  • Prior flooding or drainage problems

  • Roof leaks

  • Plumbing leaks inside walls

  • Past water remediation not disclosed

Water issues escalate quickly—often into mold, rot, or structural damage.

Foundation and structural movement

  • Prior foundation repair

  • “Normal cracking” that wasn’t normal

  • Cosmetic fixes hiding ongoing movement

Foundation disputes can turn a modest claim into a very large one.

Mold and moisture history

  • Past mold remediation

  • Chronic humidity problems

  • HVAC issues contributing to moisture

Even when mold is no longer present, the history matters.

Roof and storm damage

  • Patching presented as replacement

  • Hail damage or repeated insurance claims

  • “Repaired” leaks that later return

Roof disputes often hinge on how repairs were described.

Unpermitted or DIY work

  • Electrical, plumbing, additions without permits

  • Conversions that fail inspection later

“Worked fine for us” is not a legal defense.

Termite and wood-destroying insect damage

  • Past infestations

  • Prior treatment or structural damage not clearly disclosed

Promised repairs that weren’t properly done

  • Repair amendments

  • Incomplete or rushed fixes

  • No documentation

These are contract cases—and they’re common.

The legal tools buyers use (simplified)

Buyers don’t need just one theory.
They often plead several.

Common-law fraud

Buyers claim the seller:

  • Misrepresented a material fact, or

  • Failed to disclose something known,

  • And the buyer relied on it

Texas generally allows four years to bring fraud claims (Texas Civil Practice & Remedies Code §16.004).

Statutory fraud in real estate (Texas Business & Commerce Code §27.01)

This Texas-specific statute is powerful.

Why?
Because it allows recovery of:

  • Actual damages

  • Attorney’s fees

  • Certain litigation costs, including expert witness fees

  • Potential exemplary (punitive) damages

Experts are where real estate lawsuits get expensive.

Deceptive Trade Practices Act (DTPA)

When applicable, DTPA allows buyers to recover:

  • Economic damages

  • Attorney’s fees

  • Potential additional damages for “knowing” or “intentional” conduct

Most DTPA claims must be filed within two years (Texas Business & Commerce Code §17.565).

Breach of contract

If a seller agreed—in writing—to make repairs or deliver something and didn’t, that’s a separate claim.

Many contract actions fall under the four-year limitations period.

The “as-is” clause: misunderstood and over-trusted

“As-is” helps sellers only when the sale was honest.

Texas courts have held that a buyer who agrees to purchase property “as-is” generally assumes the risk of defects—unless the seller:

  • Fraudulently induced the buyer, or

  • Impaired the buyer’s ability to inspect

(Prudential Insurance Co. of America v. Jefferson Associates, Texas Supreme Court)

In other words:

As-is protects disclosure.
It does not protect deception.

What buyers can actually win

Many sellers assume the worst-case outcome is paying for a repair.

Sometimes it is.
Sometimes it isn’t.

Potential remedies include:

Economic damages

  • Cost to repair

  • Diminished value

Attorney’s fees

Often the most painful part.

Under statutes like DTPA and §27.01, legal fees and expert costs can exceed repair costs.

Multiplied or exemplary damages

If conduct is found to be knowing or intentional, damages can increase significantly under certain statutes.

Rescission (rare, but possible)

In severe cases, buyers may seek to unwind the sale entirely.

The pattern that puts sellers at risk

Lawsuits gain traction when the buyer’s story sounds like this:

  • “They checked ‘no’ on the disclosure, but the problem clearly existed.”

  • “There were obvious signs of prior repairs we weren’t told about.”

  • “Fresh paint appeared exactly where the moisture issue is.”

  • “We were discouraged from further inspection.”

  • “The repair failed almost immediately after closing.”

Whether the buyer ultimately wins is case-specific.
But those narratives are what get cases filed.

A neutral, practical takeaway for sellers

Most post-closing lawsuits are preventable.

Not by hiding issues—but by handling them correctly:

  • Treat the disclosure as a sworn statement

  • Disclose known issues clearly, even if repaired

  • Keep documentation

  • Avoid cosmetic cover-ups

  • Allow inspections without friction

  • Complete agreed repairs professionally and with receipts

  • Price honestly when defects exist

Buyers can forgive defects.
They rarely forgive surprises.

Claim Type Common Trigger Typical Remedies Common Time Limit
Common-law fraud Misstatement or nondisclosure of a known material defect Economic damages (repairs/value loss); sometimes more depending on proof Often up to 4 years (Tex. Civ. Prac. & Rem. Code §16.004)
Statutory fraud (Tex. Bus. & Com. Code §27.01) False representations/promise used to induce the real estate transaction Actual damages + attorney’s fees and certain costs (incl. expert witness fees); possible exemplary damages Often pled alongside 4-year claims; fact-specific
DTPA (consumer protection) “Deceptive” acts/omissions tied to the transaction (when applicable) Economic damages; attorney’s fees; potential additional damages with required findings Generally 2 years (Tex. Bus. & Com. Code §17.565)
Breach of contract / repair amendments Seller promised repairs/docs and didn’t deliver Cost to complete/repair; damages tied to contract terms Often up to 4 years (Tex. Civ. Prac. & Rem. Code §16.004)

Important note

This article is general informational content, not legal advice.
Anyone facing a specific situation should consult a qualified Texas real estate attorney.

Sources used:

Bill Ross https://BillRossRealtor.com
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