What to do if I’m being sued by the buyer for the breach of a sales contract?

UPDATED: Oct 1, 2022

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What to do if I’m being sued by the buyer for the breach of a sales contract?

In February, I was attempting to sell an apartment complex. My real estate agent asked my mother to sign the sales contract with the buyer; her name was not listed on this property. My mother signed all paperwork. My real estate agent described to my mother that I can always sign the full documents at the end of selling process. In March, the buyer signed contract with my mother, almost a month later the buyer asked my real estate agent if we can offer $30,000 and I agreed. So, my agent asked my mother to sign the agreement paper that agreed to lower the price to $30,000. Within 2 days, the my agent called my mother if there’s anymore room to further lower the price for buyer. At this time, we my mother and I rejected the offer, and wondered why if the initial contract had been signed and went through the escrow process, the buyer was still bargaining repeatedly for lowering the price. The real estate agent’s verbally replied to my mother that the whole contract wasn’t even entered through escrow process,which was not true after I requested to see whatsoever documents signed and kept by my mother. The information shows that the escrow closing date was in April. In March, 1 week before the escrow closing date, the buyer terminated this purchasing contract by the reason that there is a tenant subleasing his/her unit to another roommate, also operating vehicle repairs outside of the apartment unit, and stated that the activity is in violation of city ordinance. The buyer and my agent gave my mother a termination contract and ask my mother to sign it as to agree this termination, and also to sign to agree return/release buyer’s earnest fee deposit fee which was held by escrow company. I requested to have all documents signed by my mother from escrow company, but never heard or received anything from the escrow. In April, 2 weeks after the escrow closing date, the buyer’s attorney sent me a letter addressed to my name. It requested that my mother must sign the termination contract paper that agrees to give back the buyer’s earnest fee. I ignored the letter, as I didn’t sign the purchasing contract. My mother was not a legal property owner, therefore, I don’t have to reply to the buyer’s attorney In May, the attorney sent twice the similar letter notice as to ask my mother to sign and agree to give back buyer’s earnest fee, or else, the buyer will file a lawsuit against me. This month, I received a packet of letters that contained civil lawsuit information, stated the matter that I breach of contract, with assigned court case number, and also included a stack of 10 to 15 pages of the purchasing agreement that was signed/initialed by buyer and my mother. What should I do? I am too hesitate to sign or have my mother sign anything in regard to this condition that I felt this whole event was already an irregular business practice. My seller agent is not actually doing his job but rather standing more by the buyer’s side. I found a surprising forgery document that was not signed by my mother a paper document stated that my mother had authorized this agent to sell this property for six months. However, my mother never signed any other contracts that authorize agent to sell the property for up to 6 month. My mother has verbally said to authorize agent to sell this property up to 3 month. What’s the best solution to this situation? Should I or my mother signed the contract termination? I am hesitated that it may result in even more unpredictable result against my mother or me. What should I do to protect ourselves from this point?

Asked on June 17, 2018 under Real Estate Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You and your mother need to retain an attorney. If your mother did not have authority to sell the unit (e.g. was not an owner and did not have authority from you), she may have been committing fraud by trying to sell something she had no right to sell. Even if what you did was innocently intentioned, it was wrong in practice, and you need a lawyer to help you sort this out. Do not sign or do anything until you speak with an attorney, but speak with a lawyer immediately, before you default on the lawsuit by taking too long to respond.

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