seller just disclosed a preexisting option contract on property

[Rob Soete]

Working with a seller of a multi unit building, and it just came out that he signed an option contract on the subject property a few years ago, and the optionee, has never exercised his right to purchase. It is a very poorly written contract with a 1 month continuous term so long as the optionee pays on time which he hasn't. Nothing was ever recorded within the county, and title insurance will not cover something that isn't public record. My question for everyone who sees this, is what should my next step be? The seller has sent certified mail to the optionee notifying him that he is terminating the option contract.