Backing out of purchasing a duplex last minute

[Landrin Lewien]

I need help! I planned to buy a duplex, everything was going good until 2 days before closing I found out that one of the tenants haven’t paid rent yet for this month, I did a final walkthrough and the place was very dirty, dog piss on the floor and smelled. I then realized that once I close on this duplex that I’m responsible for this tenant and responsible for kicking him out. We had a lot of discussions and I wanted to move closing back 1 month to make sure that the current tenant was out by then, (his lease was up in a month). The seller wanted to do everything he could to still close on the agreed day. But I wanted to back out because of the thing I saw on the walkthrough and about the rent not being paid. The seller then wrote me a big letter saying if we don’t close then he wants to take my earnest money, pay for a few septic issues that were fixed during closing and compensate him for rent payments on the other side because he served the other side notice to be out. He’s threatening to take me to court. Do I have a leg to stand on? The realtor makes it sound like I don’t.

Yes I wanted to back out but because of the issues that I saw on final walkthrough. Is that enough purpose to get sued? He really wants to close and he’s pissed off at me now. I’m scared, I need help. How should I handle this? I agreed to give him all of the earnest money but now he wants more. My last resort is court I don’t wanna do that.

[Mason Hickman]

@Landrin Lewien

I'll caveat this at the beginning by saying I'm not an attorney and you should consult one. However, you should look at the purchase and sale agreement to see if the damages are restricted to the EMD. See below the standard P&S we use for the buyer's default section. In this example, you would only be on the hook for the earnest money.

15. Buyer's Default. If the BUYER or BUYER'S Nominee breaches this Agreement, all escrowed funds paid or deposited by the BUYER shall be paid to the SELLER as liquidated damages. Receipt of such payment shall constitute the SELLER'S sole remedy, at law, in equity or otherwise, for BUYER'S default. The BUYER and SELLER agree that in the event of default by the BUYER the amount of damages suffered by the SELLER will not be easy to ascertain with certainty and, therefore, BUYER and SELLER agree that the amount of the BUYER'S deposit represents a reasonable estimate of the damages likely to be suffered.