The Statute of Limitations on Real Estate Purchase Contracts in Texas

In Texas, real estate purchase contracts must be in writing.
In Texas, real estate purchase contracts must be in writing. (Image: Hemera Technologies/ Images)

A statute of limitations is a legal provision for a civil action during a prescribed period following a specific event, during which a claimant may file a lawsuit for damages or other relief. Texas real estate law states that agreements concerning the buying and selling of real estate must be in writing to be enforceable. This means that the statute of limitations on a real estate purchase contract is based on the state’s laws governing written contracts.

Texas Statute of Limitations

According to Texas state law, Section 16.004 of the Civil Practice and Remedies Code, any legal action for breach of contract following sale or purchase of real property must begin within four years after the event that caused the action. The event is usually the signing of the contract by the parties. By that point, all parties should have disclosed information relevant to the purchase of the real estate. If one party discovers any omissions after signing the contract, he has the right to initiate a lawsuit to recover damages.

Reduced Statute Period

It is possible to reduce the statutory time period by agreement, as part of a real estate purchase contract between parties in Texas. Provided all parties agree, the time can be changed in the contract to reflect a shorter period, but this cannot be less than one year. The time stipulated may not be longer than the legal requirement of four years for written contracts in Texas.

Other Statutes of Limitations

Texas law has a number of statutes governing specific real estate problems. If a buyer of real estate finds out that the seller has not disclosed all information about defects on the property, he can begin a legal action. It may be possible for a claimant to file multiple lawsuits based on a single incident, and these are likely to have varying statutes of limitations. This means that even if the statute of limitations on the written purchase contract has expired, a different statute of limitations may apply.

Rule of Discovery

A Texas buyer may only discover the “injury” done to him after the four-year statute of limitations has passed. In this instance, the court will decide whether to apply the discovery rule, which gives the plaintiff an additional period to file the suit after he has identified the problem, or after which he could reasonably be expected to identify it. However, the extra time does not always apply. It is awarded at the discretion of the court and the plaintiff may have only a short period in which to file the claim.

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