When you enter listings into the MLS, have you ever used a dropdown menu that automatically inserts the square footage from appraisal district records? A Dallas-area agent and her brokerage, Ebby Halliday, REALTORS®, faced a lawsuit for doing just that. And they lost.
The brokerage appealed the decision. They didn’t believe the jury’s conclusion was correct. Neither did Texas REALTORS®, which filed a friend-of-the-court brief supporting the brokerage’s assertion that the agent and firm had done nothing wrong.
The Texas Fifth District Court of Appeals in Dallas reviewed the case and reversed the jury’s findings.
How This Transaction Wound Up in Court
This case stems from a condo sale in 2015 in which the MLS listing included square footage information from Dallas Central Appraisal District data. The square footage was autopopulated with the appraisal district’s data when the listing agent selected “tax” from the dropdown menu in the MLS. The listing description displayed the square footage as “1,178/Tax.”
Since the buyer purchased the condo with cash, there was no lender-required appraisal, nor did the buyer choose to have an appraisal performed. The buyer assumed the livable area of the condo to be 1,178 square feet, based on the appraisal district’s information. However, after the transaction closed and the buyer measured the condo, he found the livable square footage totaled only 885 square feet.
The buyer sued the agent and brokerage, asserting claims for violations of the Deceptive Trade Practices Act (DTPA), statutory fraud, and negligent misrepresentation. The buyer also claimed that the brokerage was negligent in its supervision and training of the agent.
In a 2017 trial, the jury found in favor of the buyer, awarding him $32,335. That was the amount he claimed he overpaid based on the difference between the appraisal district’s reported square footage and the actual livable square footage of the condo. The judge added attorney’s fees and other costs on top of the jury’s award.
Although the jury had agreed with most of the buyer’s claims, the jury did find in favor of Ebby Halliday, REALTORS® in its DTPA-claim defense that the brokerage and its agent were unaware and could not have reasonably known that the appraisal district’s square footage was incorrect. The judge, however, disregarded that portion of the jury’s finding.
What Happened on Appeal
Ebby Halliday, REALTORS® appealed the jury’s findings on several grounds. In the appellate judges’ written opinion of the case, it was established that “the term ‘/ Tax’ is understood within the real estate industry to mean the source of the square footage information, which in this case was DCAD.” The opinion also recognized that “a home’s square footage is understood in the industry to mean its ‘livable’ square feet.”
The judges also noted that the listing contained a remark that the source of information about square footage was “Deemed Reliable But Not Guaranteed.”
The opinion affirmed that there was no evidence that Ebby Halliday, REALTORS® actually knew that the condo measured less than 1,178 livable square feet. The appellate judges noted that the trial court jury found “that Ebby did not know and could not reasonably have known that the records or sources on which it relied were false.”
The judges reversed the judgment of the trial court, concluding: “Based upon our review of the evidence, we conclude that no reasonable or fair-minded juror could have found that Ebby made a misrepresentation or that it was aware at the time that DCAD’s records were incorrect.
Accordingly, the evidence is legally insufficient to support the jury’s verdict. Given this holding, we need not consider Ebby’s remaining issues. We reverse the court’s judgment and render judgment that [the buyer] take nothing.”
“This legal victory for Ebby Halliday, REALTORS® at the appellate level is also a big win for all our members and MLSs,” says Texas REALTORS® General Counsel Lori Levy. “The amicus brief we filed laid out a strong legal argument why agents and brokerages shouldn’t be held liable when appraisal-district information is incorrect. That Ebby Halliday, REALTORS® fought this issue in court is huge … it provides legal precedent for future square-footage disputes based on appraisal-district data.”
The Texas REALTORS® form Notice of Information from Other Sources (TXR 2502) can be used by members when providing information from sources like appraisal districts.