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Be careful when selling flood-damaged property

Richard M.  Alderman Interim Dean of the Law Center

Richard M. Alderman
Interim Dean of the Law Center

Q. Am I liable if I sell a flood house “as is”? I want to make sure nothing comes back on me? Does it matter if there is an inspection? What if I fix the house up just to sell it, is the answer the same?
A. Under the law, you are not automatically responsible of you sell something and the buyer is disappointed. However, under the Texas Deceptive Trade Practices, if a person sells any property, whether a house, a car or a television, the seller may be liable for damages if the seller misleads, deceives or takes unfair advantage of the buyer, or fails to make material disclosures. The buyer would also have to show that he or she “relied” on the seller when purchasing the property. On the other hand, if the property is sold “as is,” and the seller does not misrepresent the condition of the property or take unfair advantage of the buyer, the seller would have no liability.
For example, if you were to sell your obviously flood damaged house, and your contract stated the property was being sold “as is” and the buyer was not relying on anything you said, in my opinion you would have no liability if the buyer was disappointed. If you insisted the buyer also inspect the house, it would make your position that the buyer was not relying on you even stronger.
If, however, if the property was not sold “as is,” and you deceived the buyer by stating “only the first floor of the house was damaged due to the flood,” and you failed to disclose substantial damage to the garage, you could have liability if the buyer relied on what you said and what you failed to disclose.
The bottom line is that if you are selling flood-damaged property, you must be careful to fully disclose the extent of the damage and not withhold any important information. Selling the property with an “as is” clause in the bill of sale or purchase contract provides additional protection. If you are the buyer, be sure to ask the seller about flood damage, and read anything you sign to make sure you have not agreed to buy “as is” or have stated you were not relying on what the seller said.
Finally, to get much more information about possible rights and liability arising from buying or selling things damaged in the flood, as well as other issues related to Hurricane Harvey, consider attending the Harvey People’s Law School on Saturday, September 30th. This free program will present classes on many hurricane issues and have attorneys available to meet with you one-on-one to discuss your questions. To get more information or to register, visit www.peopleslawyer.net
Q. My car was totaled during the flooding caused by Harvey. As required by the state, I have automobile insurance on my car. My insurance company tells me that it does not cover the flood damage to my car. It said I had only “liability insurance.”
A. What your insurance company is telling you is correct. Of course, you should carefully read your policy to make sure that you have only liability insurance.
As you know, Texas requires drivers have a minimum amount of insurance to cover their liability to others for accidents they cause. This is called liability insurance. Liability insurance pays to repair or replace the other driver’s car and pays other people’s medical expenses when you’re at fault in an accident. It does not cover the cost to repair or replace your car or to treat your injuries. To fully cover your damages, you need to purchase other types of coverage such as personal injury protection, uninsured or underinsured motorist, medical payments, collision, and comprehensive.
If you have only liability coverage, damage to your car caused by a flood would not be covered. To be covered for flood damage to your vehicle you need to have “comprehensive” auto coverage. As I said, the first step is to review your policy to see exactly what it covers. If you don’t have your policy, call your insurer for a copy.

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