Just a bilateral agreement that specifies:The giver of the option, or optionorThe receiver of the option, or optioneeThe purchase priceThe term (start date and end date) that the agreement will be in effectThe consideration (typically a dollar amount) paid by the optionee to secure the right to buyPLUS whatever else your attorney thinks is necessary.Make the document recordable by your county clerk, get it signed (and possibly notarized), and then have it recorded on public record.The intent is to ensure that if he tries to sell to anyone else, a title search will find this agreement and trigger a title defect.

I don't know what the scam would be, but I'd be awfully worried about a title defect, a competing probate claim or some major defect in the home that the seller successfully hid.The fact that you closed in 4 days is especially concerning. 

Most buyer agents will bargain for repairs or reducing the purchase price / seller credits after defects are found.

We do a walk through within hours of closing and do a hold-back of funds to cure any defects like trash out or eviction.If the parties agree that the seller can stay for a period of time, we execute a "use and occupancy" agreement that details the per diem cost, utilities, insurance, etc. 

It also sucks to hear that the seller was trying to hide defects which happens sometimes,  but proves that they knew about the problem at least to some degree. 

They expressed that this defect had been communicated to RDU prior to the storm and had progressed to grow worse after the deluge.

Check out landlord's liability and whether an undisclosed defect/risk in the purchase contract, or tenant estoppel letters, or whatever, let the buyer out.

From a lender's perspective (especially a note investor), a sub2 transaction lowers the value of your note because it is a defect.

As well, and assuming necessary, once done, you can advertise this upgrade and the positive resulting heating and cooling bills in future marketing when the need arises.For straight rentals (not a property sold via Lease Option, CFD, or other Owner Financing), I never pass large expenses on to my tenants (pretty much anything over $300, unless their fault), but assuming this is a defect or need that I did not see in my pre-purchase home inspection report, I will just deal with it out of my own pocket and earn a bit of positive "good landlord capital" in the process.Good luck with it!

You can avoid these issues by repairing surface defects or spackling.