Legal Question on Potential Transaction

[Derrick Deese]

Good morning BP: 

I had a question about a potential legal issue and was hoping to get some advice.  It is something I haven't encountered and have struggled to find information about this particular issue.  

Situation:

I am looking at a deal for three duplexes.  In one of the duplex units, a search warrant was issued, and the police found thousands of dollars of illegal drugs, as well as weapons.  I've contacted the police department, and there are no code enforcement issues with the property.  However, I have heard that the owners could be at risk if they knew of this issue and did not report it. 

The transaction has not yet closed yet and we are still in process of doing so, but I do not know whether we should simply a) walk away from that unit or b) continue as is given there are no code enforcement violations. 

I am also unclear of what potential risks we may face in the future with the unit (i.e. if there are additional warrants, etc). 

if anyone has any experience with a situation like this I would be forever grateful for advice.  

Thank you in advance!

Regards, 
Derrick