Business Dispute: Undisclosed Roach Infestation, Missing Permits, And Threats From The Previous Owner

location: Hawaii

My husband and I took over a shop in Hawaii after the previous owner represented in writing that the business was ready to open and had everything needed to operate. The arrangement involved a $10,000 purchase price, along with monthly payments of $800 from September through June. There was no formal written contract, but we have text messages, payment records, and receipts documenting the arrangement. We paid a deposit and made additional payments.

After taking over, we discovered that the shop had reportedly been operating for approximately five years without proper business licensing, required permits, or inspections, including fire-safety requirements. We also discovered a significant roach infestation that was never disclosed to us and that we are still struggling to resolve.

There were several other issues with the condition of the shop, including problems with the plumbing and toilet, broken air conditioning, and a malfunctioning hot-water dispenser. We also discovered that basic fire-safety requirements had not been addressed. The shop was not in the condition we had been led to believe.

We spent more than three months trying to resolve the issues and were unable to officially open or generate income. We did not want to operate a business without the proper approvals or in an unsafe condition. We communicated these problems to the previous owner and asked to renegotiate the monthly payments because we were paying for a business we could not operate.

Rather than working toward a reasonable resolution, the previous owner began sending hostile and condescending messages, making personal accusations about our character, ethics, family, and even our ancestors. She issued ultimatums, demanded that we return all the merchandise, and threatened legal action if we did not comply. Some of her messages were insulting and dismissive, despite our attempts to communicate the problems and find a solution.

We feel that significant information about the shop’s legal status, operating history, and physical condition was withheld before we took it over. We have written messages in which the previous owner said the shop was ready to open, along with payment records, receipts, photographs, and documentation related to the missing requirements.

My questions are:

1. Could the previous owner’s representations about the shop being ready to operate, when it lacked required licensing and inspections, be grounds for a legal claim?
2. Could the undisclosed roach infestation and other maintenance and safety issues affect our payment obligations?
3. Does the fact that the business reportedly operated for approximately five years without proper licensing or inspections matter legally?
4. What are our rights regarding the merchandise, especially now that she is demanding its return and threatening legal action?
5. Should we stop communicating directly and have an attorney handle further contact?

we are actively looking for a lawyer to help with this situation, but I was hoping to get some advice and hear from others who may have experienced something similar. Honestly, I also just needed a place to vent because this entire experience has been incredibly stressful and frustrating.

located in Hawaii!