Can I counter sue a seller who is threatening to sue me if I don’t complete transaction?

UPDATED: Oct 1, 2022

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Can I counter sue a seller who is threatening to sue me if I don’t complete transaction?

We went under contract to purchase a property with an
option period. seller marked in disclosure nothing wrong
with plumbing. Had inspection done, could not check
plumbing because water was turned off. Could not get
septic inspected either. She sent a plumber to fix the leak
and stated that was why water was turned off. Would not
extend our option period so that we could have septic
inspected. We ended that contract. About two weeks later
we decided that we really like property and wanted to make
another offer. We settled on an offer with no option period.
We were told if we backed out, we would lose our deposit.
Had septic checked, which took about a week and still have
not seen official report but we were informed would need a
new septic. We want to back out because with everything
else we are aware of that needs to be fixed, the septic will
put us way over our budget. Plus, our agent found a snake
in the toilet Which sounds like more issues. Selling agent is
now threatening to sue if we don’t show up to the closing
appointment. We are moving to Texas from out of state, and
although we loved this property, there have been
discrepancies with the disclosure and inspections as well as
the dealings and ethics of the selling agent.

Asked on May 25, 2018 under Real Estate Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The seller's agent cannot sue you--she is not a party to the contract. The seller can potentially sue you if you do not close. If the seller does, you could try raising fraud as a defense since fraud would let you void the contract; you could also bring a counterclaim for any costs or losses you incurred due to the fraud. However, bear in mind that fraud requires knowledge: it is only fraud if you can show that the seller knew about issues but despite knowing of them, failed to disclose them. It is not fraud if they did not know, since you do nothing wrong to not disclose something you are yourself unaware of. So you would need to be able to show that the seller knew, or under the circumstances logically must have known, of these issues.

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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