Legal Question in Real Estate Law in California

There are no "legal forms" as you will probably have to sue the broker and lender for fraud, negligence, misrepresentation, etc. If your father is aged and not all that sharp mentally, there may also be a claim for elder abuse As the agent for the lender, the broker's on-intentional acts are also transferred to the lender as to liability. Immediately inform the lender of what the situation is, demand recession of the contract, point out that while they did not know of the condition of the house they are responsible for the acts of their agents and they had the legal responsibility to find out the condition of the house. Demand a full refund of the money your father paid. The lender will undoubtedly say no; see if you can break through their barriers to find out who their attorneys are and contact them. If it is a major lender, maybe check the court website to see which attorneys represented them in recent lawsuits so you can ask those attorneys to contact the lender. Contact the broker ans ask for his explanation -- probably do it by e-mail so you have a record. If your father took out a loan see if that lender can help out since their being paid back is endangered.

The net result of doing all of the above will likely be nothing positive. You will have to hire an attorney to exert more pressure and likely to file a lawsuit. Sorry about your situation.

It is perfectly legal to sell a tear-down property, as long as everything is disclosed. There is absolutely no requirement of any kind regarding the condition of a property before you can sell it (with some special exceptions for commercial toxic contaminated sites and other similar special cases). There is nothing illegal about taking advantage of a person who willingly buys a terrible property, unless it is by fraud or failure to disclose material facts, or unless it is taking advantage of a person not fully in control of their mental faculties, or who is subject to undue influence or duress, such as elder financial abuse. Also, the lender has no obligation of any kind to the borrower regarding the condition of the property. If the property appraised for the selling price without fraud or collusion by the lender, and your father can pay the mortgage, the lender's duties end. Without knowing how or why your father came to buy such a money pit, it is hard to advise you regarding options, but the first place to start is the disclosures and inspections. If there were material omissions in the disclosures, the that seller and/or agent knew or should have known about, you have a good case to sue for rescinding the sale and/or damages. If everything was disclosed, however, you are going to have a tough time undoing the sale, because you will have to prove your father lacked mental capacity to understand the disclosures, or that he was subjected to undue influence or duress.

Legal?? Sure. It is not a crime.

However, if you can prove what you claim about defects, fraud, concealment, etc., then you have grounds for a lawsuit against the seller and broker[s]. Assuming you have a normal written Real Estate Purchase Agreement, it will have a section where all known defects were to be fully disclosed, and an attorney fee provision as well. If serious about pursuing this, feel free to contact me.

The big issue is what was disclosed, and when it was disclosed.