What is the ruling on the money paid by the buyer to settle outstanding debts owed by the seller (electricity and water), which the latter did not declare at the time of sale and refused to pay after their discovery? And is this money considered unlawful for the seller as a result of deception and lying?

What the seller did involves lying, based on the Almighty's saying: (Then we supplicate fervently and invoke the curse of Allah upon the liars), and the saying of the Prophet, peace and blessings be upon him: "And indeed, lying leads to wickedness, and indeed, wickedness leads to the Fire."

It also involves deception by concealing a matter that, if the buyer had known about it, he would not have concluded the sale, based on the saying of the Prophet, peace and blessings be upon him: "Whoever deceives is not of me."

The questioner has the option to annul the sale, and the seller is legally obligated to fulfill the debt that is upon him. If the questioner paid those debts with the intention of recourse to the seller, then he has that right. If the seller fulfills them, that is what is desired. If he does not fulfill them, he is a procrastinator, and "the procrastination of the wealthy is injustice." It is better to forgive him if that does not encourage him to persist in his wrongdoing.