Find out how PeytonBolin handled a tenant rights case involving a home buyer and a tenant who argued for rights to purchase a property.

Litigation attorney Michael Goldstein recently dealt with a complex tenant rights case involving a tenant, a property's original owners, and two subsequent buyers. The first buyer is Michael's client in the case. He was involved in a claim from the tenant who wanted to purchase the property and believed their rights were violated by the initial purchase. The case exemplifies key lessons about property ownership and tenant rights.

Learn how the issue began, what the claims stated, and what happened in court with the help of the PeytonBolin team.  

Background of the problem

A tenant was residing in a home that had been purchased by PeytonBolin's client years ago. The buyer was aware of the tenant. Once they purchased the home, the first buyer sold it to a different buyer, who also knew about the existing tenant. 

The tenant then claimed that they had had a short agreement with one of the original property owners many years prior that stated the tenant would eventually purchase the home. The tenant had also previously tried to get a loan to buy the property, but couldn't obtain one. The agreement wasn't public record, however, and it wasn't signed by both owners at the time. Both of these issues hurt the tenant's case. 

PeytonBolin's client purchased the home three years after the tenant’s agreement was dated. The client then immediately resold the property to the current owners. These current owners tried to evict the tenant, and that was when the tenant filed a counterclaim that named the current owners, the client, and the original owners.

Identifying the parties involved in this case about tenant rights

This case has a complex structure, so let's break down the different parties and their roles and backgrounds:

  • Seller's tenant
    This tenant resided in the property under the original owners and continued to live there through the two subsequent purchases. They had a short unrecorded agreement with one of the original owners about eventually buying the property.

  • Seller
    The tenant lived in the property under these original owners who then sold the property three years after the short unrecorded agreement.

  • Buyer (the client)
    The first buyer, who frequently buys properties and resells them, purchased the home and immediately sold it to the current owners.

  • Future buyer
    These are the current owners of the property, who moved to evict the tenant after they purchased the property.

These four parties are all involved in the case. The tenant's counterclaim named all three of the owners and counts against them.

The tenant's counterclaim and litigation

The issue on the table had to do with tenant rights. The tenant's claim centered around the issue that the client (the buyer) should have known about the unrecorded contract, even though it came to light after the property transactions. They believed they still had the right to purchase the property based on that agreement, and that the client infringed upon their contractual rights when buying it. The tenant's counsel also argued that there was a civil conspiracy against the tenant, among other claims.

PeytonBolin conducted research as to the causes of actions raised in the complaint and the subsequent amended complaint. The matter was heavily litigated. Key to the case was the fact that the agreement the tenant produced wasn't recorded or known by any subsequent buyers or signed by both owners for the sale of real estate. Joint ownership requires that all owners sign in property sales and contracts. This weakened the tenant's case.

The contentious hearing regarding the counterclaim led to the dismissal of the case against the client and the current property owners. The tenant then filed an amended complaint.

The amended complaint and dismissal

The tenant's amended complaint raised fraud allegations against the client (the buyer). These allegations pertained to documents between the client and the property's current owners. The amended complaint was dismissed with prejudice as to the client.

The PeytonBolin team filed a motion for sanctions before drafting a motion to dismiss the amended complaint, as the claims had no merit. The attorney believed the tenant's legal representation should have known that these allegations didn't involve or impact the tenant. 

There is now a pending motion for attorneys' fees, pursuant to the dismissal of the amended complaint with prejudice. If a motion for entitlement to attorneys' fees is granted, fees can be awarded against both the plaintiff and their counsel based on the motion filed.

Future implications

This complicated case highlights issues that arise when agreements aren't completed properly and when necessary information isn't disclosed in property transactions. The case may have ended differently if the tenant's agreement was lawful or even if the buyer was aware of the arrangement upon the sale. In the end, the rights of the tenant had not been violated by the client.

These matters can get complicated fast when laws are put into question and multiple parties are involved. Michael Goldstein and the rest of the PeytonBolin team are ready to meet with you about your real estate law case. Our services include tenant and landlord law, property transactions, HOA law, and much more.

Contact PeytonBolin to set up a consultation with our experienced legal team.