You asked:How is it Jim's GF could sign All the closing papers for the house?
A: Because you also signed the contract. Under the "statute of frauds
," which is several hundreds of years old, all contracts for the transfer of an interest in real estate for more than one year must be in writing. If both you and the buyer signed, then there is a valid contract to transfer real estate, and the statute of frauds is satisfied. How could the seller be responsible to an owner llc that didn't exist until 10 days before closing?
A: If you, as seller executed a deed conveying the property to the LLC, then by your actions, you consented to that transfer -- regardless of the sales contract. However, if Jim and GF were notified of the lead issue, then that notice would be imputed to the LLC, because owners of an LLC are agents of the company -- and whatever an agent knows, is imputed knowledge of the agent's principal -- in this case, the LLC.
Assuming that you provided the necessary disclosures, then you are not responsible.
At best could it not be said that Jim was the buyers agent?
A: I think there is no doubt about this. If Jim doesn't have a valid real estate brokers license, then his actions as agent were probably illegal. But, this isn't particularly relevant to the disclosure or notice to the LLC. What matters is that notice was provided according to law. If it was, you're not liable -- otherwise, you may be liable.
If he can't be described as buyers agent, nor the owner what would his legal title be?
A: An agency relationship can be created by actual authority (express or implied appointment by a principal); apparent authority (manifestation to third parties by a principal that a person is their agent); or ostensible authority (by operation of law, such as where a person who engages in the negotiation of a transfer of real estate on behalf of another).
In short, Jim was the agent -- possibly an illegal agent, but the agent, nevertheless.
would the seller be wrong for assuming Jim and his GF were the owners since they acted as such?
A: I don't think this is relevant. What matters is the documents: the purchase contract and the deed. Under the "doctrine of merger
," the deed generally extinguishes the contract at the time of delivery -- except where the contract is supposed to survive transfer of title. So, if you executed the deed in favor of someone, that someone is the owner, regardless of anything that preceded the deed transfer.
Could it be said there was misrepresentation on Jim and his GF's behalf
A: Misrepresentation requires a false statement of material fact, intended to induce justifiable, detrimental reliance and causing damages. A seller who observes that a transaction is not occurring as originally represented, but who nevertheless proceeds with the transaction, is not justified in relying on prior misrepresentations of fact that are contrary to what is obvious. Your facts suggest that you saw the transaction change forms on multiple occasions, so I believe that regardless of the original alleged false statements, there probably is no actionable misrepresentation. But, even if there was, misrepresentation may be intentional/fraudulent, negligent or innocent. Any one of these species is grounds to rescind a contract. But, once the deed is signed and delivered to the new owner, the contract is merged, and so the misrepresentations, unless fraudulent, are likely extinguished as well.
The issue is whether or not Jim and GF were provided notice of the lead issue. If yes, and you can prove it, then you're not liable. Otherwise, you may be liable.
I realize that this may be simplifying things a great deal. However, judges usually try to distill a case down to the central issue, and resolve everything around that. Here, that issue is notice concerning the lead. I doubt that a judge would look past this in rendering judgment. That's how I would probably resolve the case if I were sitting as judge.
Hope this helps.