If he is serious about pursuing this then he will hire an attorney and you can defend your position.If you were dishonest and knowingly hid a problem in order to take advantage of the buyer, then I recommend you do the right thing and help correct it before he comes after you and asks for more.

Defendants don’t necessarily have to be actually served, otherwise vacant properties could never be foreclosed.

You can use the same ratio, if you believe that is wrong you can allocate price but have to defend if audited. 

Now if you never met your tenant and had a outside property management company and never personally inspected the property you would likely have a perfect defense to that claim but even then they could sue you and you would have legal fees etc to defend it.  

He was actually rude and overtly mean to his tenants in front of us, and he publicly defended all the deferred maintenance. 

@Jorge Patino I'm not familiar with NC laws but in Georgia, you must have the defendant personally served in order to get a money judgment.  

The counterlawsuit allowed us to take control of the conversation vs just defending ourselves in court.

The Agency’s investigations are complaint driven, so we rely heavily on the public, and our licensees to bring these individuals to our attention"so all though wholesaling is taught and defended especially on BP its not really legal the way most do it in virtually any state if you actually read the law.. but that does not mean it does not happen every day of the week .. just depends when a state wants to focus on enforcement.. so you can see our state will do something if a complaint is filed and I know they will.. one of my bird dogs got a cease and desist had to go to a hearing with a lawyer and paid 5k fine.. all for putting a forsale sign in a yard on a home he did not own..

They do not care what you put into Capex/repairs and management (it just is a place they can hit and defending it is a waste of time).

Are there ways to defend against this?