The Texas Real Estate Commission (TREC) is the state agency that licenses various real estate professionals, including inspectors, and ensures that they follow all relevant laws and rules. Violations of these laws or rules can lead to disciplinary proceedings and severe sanctions. As a result, all real estate inspectors must keep up to date with changes in the laws and rules that govern their profession, including those related to real estate inspection fraud.
If you are facing disciplinary proceedings resulting from allegations of real estate fraud, consulting a real estate inspector license defense lawyer to defend your license can be crucial. By enlisting a strong legal advocate from the outset of your case, you may be in a better position to reach a more positive resolution.
General Standards of Conduct for TREC-Licensed Real Estate Inspectors
22 Tex. Admin. Code § 535.220 outlines the general standards of professional conduct for TREC-licensed real estate inspectors as integrity beyond that of a person involved in ordinary commerce. Each inspector must uphold a high degree of professionalism, independence, objectivity, and fairness in conducting home inspections, as well as uphold the integrity, reputation, and practice of the home inspection profession. The inspector also has a duty to protect the public against fraud, misrepresentation, or unethical practices in the field of real estate inspections.
Likewise, Tex. Occ. Code § 1102.302(2) states that an inspector may not act in a manner or engage in a practice that is dishonest or fraudulent; or involves deceit or misrepresentation.
Additionally, TREC-licensed real estate inspectors must follow the Standards of Practice (SOPs), 22 Tex. Admin. Code § 535.227 – 535.233, that TREC has developed as the minimum requirements for a real estate inspection in Texas. These SOPs apply to all real estate inspections performed for a prospective buyer or seller of one to four-family dwellings, or most residential properties. As part of these SOPs, the inspector must provide the prospective buyer or seller with a completed TREC Property Inspection Report Form (REI 7-6).
If TREC-licensed real estate inspectors violate any of the rules or laws that relate to their profession, then Tex. Occ. Code § 1102.401 gives TREC the authority to reprimand the inspector, place the inspector’s license on probation, or suspend or revoke the inspector’s license. Furthermore, under Tex. Occ. Code § 1102.403, TREC may assess an administrative penalty for any violation of a rule or law by an inspector, instead of or in addition to another form of disciplinary action.
Civil Liability of TREC-Licensed Real Estate Inspectors
Under Tex. Business and Commerce Code § 27.01, fraud in a real estate transaction may consist of a “false representation of a past or existing material fact, when the false representation is: (A) made to a person for the purpose of inducing that person to enter into a contract; and (B) relied upon by that person into entering into that contract. A person who makes this type of false representation is liable to the person defrauded for actual damages, as well as reasonable attorney’s fees and court costs.
Therefore, if a licensed real estate inspector completed a fraudulent real estate inspection report that purposely failed to disclose a defect in a residential property, and the buyer subsequently purchased the property relying on that inspection report, the buyer may have a valid cause of action against that inspector for fraud under this section.
A consumer who has obtained a civil judgment for damages in court against a TREC-licensed inspector for real estate inspection fraud may be able to seek recovery from the Real Estate Inspection Recovery Fund if the inspector refuses or is unable to pay the judgment. Although the Texas state legislature now has repealed the fund, consumers have until March 1, 2026, to file a claim with the Fund for events giving rise to a claim that occurred before September 1, 2023.
Criminal Liability for Real Estate Inspection Fraud
Under Tex. Occ. Code § 1102.406, a person commits an offense if the person willfully violates or fails to comply with this chapter, including acting in a manner or engaging in a practice that is dishonest or fraudulent, or involving deceit or misrepresentation under § 1102.302(2). This offense is a Class A misdemeanor under Texas law.
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We Will Represent Your Interests in Your Disciplinary Proceedings Before the TREC
We know how important it is for you to maintain your real estate inspection license and work in your chosen field. All too often, a simple misstep or oversight can lead to disciplinary proceedings and unwanted sanctions, which can threaten your license and career. The experienced real estate inspector license defense attorneys at Bertolino, LLP, will advocate to help you protect your rights throughout any disciplinary proceedings. Together, we will work to develop the defense strategy that is best calculated to maintain your license and professional future. Call us at (512) 515-9518 or contact us online.
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