Can someone back out of a verbal agreement when it becomes necessary for them to sell a house due to illness and Medicaid not paying?

UPDATED: Sep 30, 2022

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Can someone back out of a verbal agreement when it becomes necessary for them to sell a house due to illness and Medicaid not paying?

We put $1600 down on a house to buy on land contract with a verbal agreement of $200/month for a total of $20,000. We started 9 months ago and have never missed a payment. The lady we are buying the house from now has stage IV lung cancer and has to sell the house because Medicaid will not

pick up due to her having assets in her name. She has given is 30 days to pay her the $16,400 or we have to move. Even though we have a verbal agreement, can she back out on the deal if we had witnesses. And if we can’t come up with the money, are we just out the $3600.

Asked on July 16, 2017 under Real Estate Law, Kentucky


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Under the "Statute of Frauds" in your state, found at Kentucky statutes 371.010, a contract to buy real estate must be in writing to be enforceable; an oral contract (that, not "verbal," is the correct term) is not enforceable. So she is not bound to the contract and can "back out" of it.
You can likley recover your money even though the contract is not enforceable, under theories of "fraud" (misrepresenting to you her intention to sell) and/or "unjust enrichment" (it would be unjust to allow her to keep your money without you getting anything for it). So if necessary, you can likely sue her for the return of your money, but cannot force her to sell. In the future, always get any real estate contract in writing.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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