Legal Question in Real Estate Law in California

a relative bought an REO home to flip. In the midst of remodeling it, a buyer offers to purchase and agrees to finish the remodel at a reduced price. buyer intends to obtain VA financing. seller agrees and verbally appears to be helpful with suggestions of the damages to the home that will need repaired. seller agrees to allow buyer to move into the home and live there while making some necessary repairs for a termite clearance. (va won't allow buyer to pay for termite repairs thru escrow seller is aware of this and allows buyer to do this outside of escrow. home is FULL of termites, seller insists buyer should make repairs without "killing" by spraying the termites, and then get another company to come out to inspect with hopes of obtaining a clearance. seller has flipped many homes in the past and insists that he's does this all the time without any problems arising. seller is relative to agent, and knows seller has flipped many properties with many of those transactions ending in loss of deposit from buyers due to the, near impossible terms the seller puts in contracts, and cancels, this transaction is first time with relative the seller, agent is new to the business but believes that a relative wouldn't intentionally set out to take advantage of this buyer. However this agent believes otherwise now. This seller covers every angle to be able to get repairs done to the home and he knows full well that VA wouldn't pass inspection on this home. seller keeps agents attention away from this home and buyer by writing contract after contract after contract for days upon days, so now the contingency period elapses. agent asks for extension because the home did not have any heat source, the appraisal was delayed, seller says no, not without non refundable deposit paid thru escrow and release prior to close of escrow. buyers pay $650 for heater installed to obtain appraisal, buyer says no to sellers demand of increased deposit until home is appraised. seller gives buyer 30 day notice to move out, buyer feels seller intended to defraud VA with his idea of termite clearance, and decides to cancel. seller gives buyer notice to perform, seller knows appraisal has not been done yet and is impossible to get in 24 hours. seller knows the contract inside and out, and is able to get buyers deposits and sues for liquidated damages whenever possible. seller demands the earnest money deposit, he already has $1000 security deposit, he already collected monthly rent, he's given 3 days notice to pay or quit, buyer paid rent, now seller is suing for 3% liquidated damages in small claims court. buyer feels seller entered into this contract with full knowledge that buyer would not meet the demands of the terms in the contract and took full advantage of buyer to get repairs made to his home at buyers cost, to get buyers earnest money deposit, to keep buyers security deposit, and ultimately sell the house to someone else for higher price at cost of buyer. buyer feels seller has harrassed him and is angry that seller has lied about everything, now wants his money, wants money for damages where there is none, and feels there must be some kind of law that prevents sellers from taking advantage of people in this way. is there?

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