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?

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 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.


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