Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In a real estate transaction, which party is primarily protected by the DTPA?

1. The seller

2. The buyer

3. The lender

4. The broker

The correct answer is: The buyer

The Deceptive Trade Practices Act (DTPA) is designed primarily to protect consumers from deceptive, false, or misleading business practices. In a real estate transaction, the buyer is seen as the consumer and, therefore, is the party primarily protected by the DTPA. The Act provides buyers with legal recourse against sellers or businesses that engage in deceptive practices, which can include false advertising, failure to disclose important information, or misrepresentation of property features. The intent of the DTPA is to level the playing field between consumers and business entities, giving buyers a means to seek compensation for damages caused by deceptive practices in the real estate market. While sellers, lenders, and brokers are part of the transaction, the focus of the DTPA is on safeguarding the rights and interests of the buyer, who is often at a disadvantage due to a lack of information or power in the negotiation process. This consumer protection framework helps ensure that buyers can confidently enter into real estate transactions, knowing there are legal protections against potential fraud or misrepresentation.