How Do I Respond to a DTPA Demand Letter Over an Owner-Financed Home Sale in Texas?
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Reviewed & verified by A. Jason Velez, Esq.*
Managing Attorney, 1LAW · Last reviewed January 1, 2026
Legal Inquiry
Consumer Legal Issue
I sold a manufactured home with owner financing. The buyer defaulted, and now I've received a demand letter accusing me of violating the Texas Deceptive Trade Practices Act, the Texas Finance Code, and committing conversion.
Attorney Answer
A demand letter accusing you of Texas Deceptive Trade Practices Act (DTPA) violations is a serious step, but it is also a normal part of the process and does not mean the buyer will win. In fact, that letter may be the legally required notice a consumer has to send before filing a DTPA lawsuit, and how you respond to it can affect the case later.
Texas Business and Commerce Code Section 17.505 requires a consumer to give written notice at least 60 days before filing a DTPA suit, describing the complaint and the damages claimed. If this letter is that notice, you have an opportunity to respond in writing and, in some cases, offer to fix the problem or settle before anything is filed in court. Doing nothing is usually the worst option.
Since this involves owner financing of a manufactured home, Texas Finance Code Chapter 347 governs manufactured housing retail installment contracts, including required disclosures and, in some situations, licensing for the seller. Whether your sale met these requirements will matter a great deal to how strong the buyer's claim actually is. Conversion, the other claim mentioned, is a general legal claim about wrongfully taking or keeping someone else's property, and it depends heavily on the specific facts of what happened after the default, including what your contract said about repossession.
What you can do
1. Pull together everything in writing: the sale contract, financing terms, payment history, and any notices you sent about the default. 2. Review the deal against Texas Finance Code Chapter 347's disclosure requirements, ideally with an attorney's help. 3. Respond to the demand letter in writing rather than ignoring it, even if only to acknowledge it while you get legal advice. 4. Avoid taking any further action regarding the home or the buyer's property until you've spoken with an attorney, since conversion claims often turn on exactly what was done after the default. 5. Note that DTPA claims generally must be filed within two years under Texas Business and Commerce Code Section 17.565, so this dispute has a real timeline attached to it.
This is general legal information, not legal advice. A Texas attorney experienced in the DTPA and manufactured housing law can review your specific contract and respond to the demand letter on your behalf.
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Frequently Asked Questions
What is the Texas Deceptive Trade Practices Act and does it apply to a private sale like this?
The DTPA protects consumers from false, misleading, or deceptive business practices in Texas, and it can apply to private sales, including owner-financed manufactured home deals. Whether it actually applies here depends on the specific representations and disclosures made during the sale.
Do I have to respond to a demand letter before I'm sued?
You are not legally required to respond, but ignoring it removes your chance to resolve things before a lawsuit or to make a settlement offer that could limit damages later. A written response, even a brief one while you get legal advice, is usually better than silence.
What records should I gather to defend against a DTPA and conversion claim?
Collect the signed sale and financing agreements, all payment records, any default notices you sent, and every message exchanged with the buyer. These documents show what was actually agreed to and disclosed, which is central to both claims.
