Real Estate Practice Group
Preserving Purchaser Status While Responding to an Investigation of a …
2026-09-03
Preserving Purchaser Status While Responding to an Investigation of a Suspected Sham Change of Residence and Possible Cancellation of the Supply Agreement
1. Facts and Background
A won a housing subscription and entered into a presale agreement, but investigators contacted A regarding a suspected Housing Act violation arising from the circumstances of A's change of address. A retained LK Partners LLC to assess the effects on subscription eligibility, potential criminal liability, and status under the presale agreement, and to organize the necessary evidence and response procedures.
2. Key Legal Issues
First, it was necessary to determine whether A had actually resided at the new address. Second, the relationship between the eligibility reference date and A's actual living arrangements had to be assessed. Third, A had to prepare for possible cancellation of the supply agreement under Article 65(2) of the Housing Act, which may proceed separately from the criminal process. Because a criminal disposition such as no charge does not bind the contractual cancellation decision, the two tracks should be prepared separately from the outset.
3. Work Performed and Outcome
LK Partners LLC (i) organized chronologically medical records, card use, utility payments, workplace changes, witness statements, and other evidence of A's living arrangements at the time of the move; (ii) prepared A's investigative statement by comparing it against the evidence; (iii) obtained the investigation referral and related records through an information-disclosure request to identify the disputed facts; and (iv) prepared evidence addressing a possible contract-cancellation notice in parallel with the criminal response. No criminal suspicion was established, relieving A of criminal exposure. The same body of evidence was then used to respond to the subsequent cancellation notice, preserving A's purchaser status. This case demonstrates that the criminal process and contractual status may proceed separately in disputes involving improper housing subscriptions; facts and living or financial records should therefore be organized chronologically for each track. Continuity in the records showing actual residence can determine the outcome.
