Legal risks - Rehab performed through power of attorney and not invoiced to the owner

[Daniel Loane]

Hi all,

I am trying to buy a property before it's foreclosure auction scheduled in a few weeks. The lawful owner got into business with a crew of non-trustworthy people by assigning them Power Of Attorney. They have multiple open escrows and refused to return security deposits. The owner is very sick, has no internet and says he only learned about that 2 days ago.

The team working for the person with the POA rehabbed the property They remodeled the kitchen and fixed some other smaller ticket items like leaking toilets, etc. My offer would be dependent on the POA being canceled.

The owner says he hasn't seen any invoices for any of the work performed from them. In case the non-trustworthy people will file invoices, he'd pay them from the proceeds of the sale.

What's the risk on my end? I know that the big work item (kitchen rehab) started was finished in early September already (so >3 months ago) but the permit isn't closed out today. I am worried that these people put a mechanics lien on the property or find another way to get back at us in case we become the new owners. Beyond mechanics liens, what could be other risks we are facing being exposed to these people?

Thanks a lot for any help!