Litigation

TCPA Doesn't Apply To Personal Real Estate Deal

By Branham & Day

The Tennessee Consumer Protection Act does not apply in a transaction in which the defendant is acting in a personal capacity and not as a business agent, according to the Tennessee Court of Appeals at Knoxville. In Abouelata v. Davis, the buyers of real estate sued the sellers for, among other things, a violation of the TCPA, alleging that the sellers’ conduct constituted unfair and deceptive acts or practices. The appellate court held that the trial judge properly granted a directed verdict and dismissed the TCPA claim. The buyers claimed that the seller husband’s experience as a real estate developer and his superior knowledge of the real estate trade made the transaction a business one, instead of a personal one, and therefore subject to the TCPA. However, the court focused on the sellers’ role in the particular transaction at issue. The court stated that it is not the extent of the sellers’ knowledge, but whether the sellers were engaged in business and acting in a business capacity when they sold their residence. The court found that the sellers were acting in their personal capacity as individuals in selling their personal residence and were not engaged in business. Therefore, the "casual sale of a person's personal residence" is not subject to the TCPA.

Full post as published by Tennessee Business Litigation Law Blog on December 20, 2006 (boomark / email).