Having to walk away from a bad "subject to" deal

[Sean Dezoysa]

I've read that the worst case scenario in a "subject to" deal gone awry is the seller & tenant sue you. But I'm not sure what they'd be suing for and what the potential liability is.

Has anyone seen or experienced a case like this? I'm trying to figure out what is at risk if this worst case scenario happens.

[Bill Gulley]

Depends on what the basis for the claim is. Fraud is popular, civil and crimnal penalties. Unfair trade practices carries a big club. Failure to disclose and making a deal an impossibility to perform can have damages exceeding the value of the deal. If you wrap financing at a profit or premium interest rate, preditory lending may be in play. Collection violations can cost you twice the amount owed. I think RESPA violation can be $10,000.

Besides the statutory limits, you can get tagged for loss of profits, costs of repairs, moving expenses, living expenses and other collateral losses.

I know a Realtor who missed the sq ft of a home by more than 10%, she ended up paying for loss of wages, plane tickets, motel bills, meals plus an award for thier trobles as well as attorney fees and court costs. It was basically false advertising. Those magic words of "more or less" only go so far.

Depends on what you do wrong, degree of negligence or intent, you can get nailed for much more than the sale price or any loan amount of a deal.