Real Estate Question
 

Here's my situation. Hope I can get some good advice.

I'm in 30 day escrow on a house and have been for about 15 days. Seller bought the house at a foreclosure auction a year ago, fixed it up, and is selling it to me. Yesterday, seller's agent disclosed to my agent that there is litigation going on between the former owners who were foreclosed upon and the current Owner (as well as the bank who did the foreclosure, maybe? They're being vague and haven't shown me the papers yet).

I call up the seller's lawyer and tell him that I'm unimpressed and ask for details about the lawsuits. He tells me that plaintiffs are wackos. There's one "Unlawful Detainer" action which was dismissed. An appeal was taken, and that appeal has been dismissed. There's also a civil suit going against seller (and others?) that seller's lawyer had a demurrer granted, but apparently just found out last week that judge gave plaintiff leave to amend and an amended complaint was subsequently filed.

I'm told by my title insurance company that they'll indemnify me and defend against any recorded actions, but that they might not be willing to let the sale go through.

My question isn't whether I have a good cause of action of fraudulent inducement and fraudulent concealment against seller and seller's agent (I think that I do, but not sure what my damages are), but rather, what the hell should I do?

Please help. I'm searching for guidance from smart people.
strazed and confused

The Buck
 

I couldn't go to a club while in college without hearing 2 Live Crew. How could you not love "Me So Horny"?

Go Wild!!!
 

He's from Toronto. Does he speak with a Quebecois accent (never heard him speak)? Weird.

And I'm guessing you have not been to Quebec in a verrrry long time (if ever) if you think no one by the name of Fernandez would be from there. That's like me saying I never would have expected to encounter a Hernandez in New York, it being so European and everything.

Real Estate Question
 

And you came here?

Unless you are totally in love with the house, get out now. You WILL be sued. No question. And it will suck for the next couple of years, as the plaintiffs draft countless complaints and pleadings filled with wild ramblings just coherent enough such that if the judge's clerk, if she takes enough LSD, can make out a possible claim and so the thing won't get dismissed. You will spend thousands of dollars (that you may or may not get back from the seller) filing responses to briefs that make no sense, only to have a judge give the other side the benefit of the doubt. Believe me, as a lawyer there are few things that can drive you crazier. And it's got to be even worse if it's your own house.

Plus, if you're really lucky the plaintiff will try to camp out in your front yard until the government agrees to give him his house back and take the antenna out of his skull.

Of course, there is a good chance that even if out get out now you will be sued by the former owners. Sorry, man. That sucks. Best of luck.

The Buck
 

I caught some ridiculous Luther Campbell pay per view special (basically a hit tub orgy) a few years back. The guy is brilliant. Never have I seen a cat make so much with so little. Miami rap was always awful, but the 2 Live Crew somehow remained listenable. I still can't figure out whether I actually liked the music or not or laughed with them or at them. Either way, I bought their discs, and Luther has a Lear Jet, so I guess he laughs best.

S(Banned in the USA might be one of the funniest unintentional comedy videos of all time)D

Real Estate Question
 

You didn't mention whether you had released your contingencies, Str8. These obviously provide an elegant way to get out and get your deposit back. But you're probably smart enough to know that, so you wouldn't have posted if it were a possibility.

I wouldn't fear being sued by the former owners if you never take title. Don't interpret balt's post to mean that it's a wash and you'll get sued either way. It's not a wash. Whatever you do, GET OUT. I cannot believe that a RE agent would let a transaction get this far and then say, "BTW, there's this little cloud over title . . . ." Unfuckingbelievable what RE agents do. Em probably thought the demurrer would be granted and you'd never be the wiser. If RE agents were lawyers, they'd get disbarred twice every day before breakfast.

Whatever you do, DO NOT go to your agent for advice on this. Em has every reason to assure you that the lawsuit is a cakewalk and you should go through with the sale. RE agents do not make money by protecting your interests, or telling the truth.

Real Estate Question
 

I agree with the get out advice. If you can get your deposit back, then walk away. It's not worth the hassles you'll have. Let the other folks sort out the consequences of the litigation, like losing the sale to you.

If they refuse to refund the deposit, then you have to plot your next move. Since they won't be able to provide clear title, you shouldn't have to close (I'm pretty sure that's a condition precedent [edited to note: check your contract; mine required a special warranty deed, which IIRC, requires a deed and warranty of clean title]), and you can tell them you won't close until they provide it. You may end up having to fight them in court for the deposit.

The way to get leverage back on them is to file a lis pendens action, but you'll need some lawyering for that. That makes it impossible for them to sell the house to anyone else, without going through you (as I understand it). You can then agree to dismiss that action when they refund the deposit plus any attorneys' fees. Threaten them with that if they don't refund the deposit quickly, and tell them the hole will only get deeper the more people they have litigating against them. If they have a half a brain, they'll get you, the sharp lawyer, out of the picture on the cheap and move along.

Good luck, and don't take legal advice from anonymous internet posters.

Real Estate Question
 

Get the papers. You don't know shit until you have the papers.

If you can't get the papers and determine that the action against the house is insane, I'd get out. A crazy pro se lunatic can cloud title over and over again fucking up your ability to sell later. Also, some dipshit cousin of the pro se asshole may tell him about the concept of a lis pendens. If the asshole files a lis pendens against the property (a filed notice advising potential purchasers of a claim against the home) it makes a home next to impossible to sell.

By the way, as an aside - no one should have to perpetually endure professional claimants. There are two often overlooked ways to shut up pro se idiots - offers of judgment and threats of frivolous litigation fees. I find most loudmouth jailhouse lawyers tend to shut up when there's a threat they may have to ante up.

It's Gotta Be the Shoes
 

Exactly.

Real Estate Question
 

I can't speak to other states, but from personal experience I can say that California courts often let these wingnuts litigate for much longer than they should. Getting to judgment or fees with such people can be more work than I would want to take on in my personal life.

Real Estate Question
 

Thanks to everyone so far. My "inspection" contingency has expired, but my others have not, so I think it's pretty darn likely that I have my contingencies and can get out if I want, especially since they didn't disclose this in the disclosures. But maybe I'm being naive. By the way, getting title insurance is a Condition Precedent to the sale going through.

But, doesn't anyone think that if I can get title insurance from a reputable company, and if I can get seller to give me backup indemnification, then I can go through with the sale feeling half-way decent about it? The seller is apparently messengering me the FAC and other pleadings, so I'm going to get to see for myself just how wacky these pro per muthafuckas be.

I give up. First the Leafs, now this.

Reality TV Gets Even Worse
 

That's pretty sick.

Real Estate Question
 

I'm not sure what you mean by this. Do you mean that the escrow agent won't close? If so, ask pointed questions about why not. Or do you mean that you won't be able to get title insurance? (Which means that you won't be able to get financing and you won't be able to close.) Since title insurance doesn't issue prior to close and since they insure marketable title, this assertion doesn't mean squat if you don't close. (Sure, we'll indemnify you if you close, but we won't ever let you close.)

Also, since you mentioned that this was a distressed property, you will need to review the underlying documents as well as the prelim. However, CA courts (you are in CA, aren't you?) tell you that you aren't entitled to rely on a prelim (it's not an abstract) so all you really get is title insurance insuring marketable title, as opposed to actually having marketable title.

Problem is, you probably chased this house all over town, submitting multiple offers before you were finally in contract and then wound up reeling from the sticker shock. Even if you don't particularly like the house, at least it's a house. A house, any house, looks good in your market, I'd bet.

If you can get your deposit back, consider getting it back and starting over. Think about whether you need a new broker.

OTOH, if market values have risen since you made the deal, this could very well be noise on the part of the seller to get you to drop out so the seller can take a higher offer. Think carefully before you walk if you think this could be the case. And if this particular seller makes a living buying distressed properties and then flipping them, you may very well be dealing with a backup offer situation.

AM(buying a house really sucks, huh?)M

Since we are bashing religions
 

SPOILER FOR AI














The Mormon is gone!

God did she suck. And not because she is a Mormon either.

Real Estate Question
 

Well, if you can't get title insurance, you can't get a mortgage, so obtaining title insurance is a practical condition precedent.

The real question is what are you buying? More hassles in litigation? Do you want that, even if it's entirely paid for? At a minimum, it means reviewing pleadings, getting deposed, going to court, etc. Everything we're paid a lot to put other people through. And even if you can avoid it, you've got the fact it's happening hanging over your head. And, then, if you need to sell, you potentially have a hard time getting out.