Deceit in Real Estate Transactions

George told Jay that George's property was sitting on a bed of oil. George also told Jay that the property was a bargain at the price of $125,000. Jay asked how George knew about the oil. George said that his father and his grandfather had become rich from working the property and that the oil revenues were beyond belief. Jay signed an agreement to purchase the property. Jay later learned that there was no oil under the property. Furthermore, Jay learned that George's father and grandfather had never even been on the property.

What Is Deceit?

Real estate transactions present opportunities for deceit. Deceit, insofar as the area of tort law is concerned, is usually defined by state law. The law varies from one state to another, so the law of the relevant jurisdiction should be consulted for further details. Generally speaking, however, a plaintiff must establish the following elements in order to prevail in an action based upon a theory of deceit:

• that there was a misrepresentation of a material fact;
• that the misrepresentation was made to induce action; and
• that there was reasonable reliance on the false statement to the detriment of the relying party.

Remedies

In the event a plaintiff prevails in an action for deceit against a defendant, numerous remedies may be available, including money damages. Here again, state law should be consulted for further details.