I've been under contract on a house in Kansas for a couple of weeks now. I've been researching tax deed properties and decided to look into my future home. Upon fulling code violation records I was surprised to find that the seller was within a grace period to correct a significant zoning violation. The seller was cited for the violation late last year and personally appeared to appeal the variance with the city's Board of Zoning appeals a few months ago and lost, so I'm certain they knew of the violation. They claimed on the disclosure that no violations of laws or regulations regarding the property, or litigation, and claimed no material alterations were made. The variance was due to work that the seller themselves had performed on the property early last year.

 To further complicate matters the seller claimed (through their agent) that the issue had been all cleared up and that it would be fine, when I asked for documentation they stated they had a letter but couldn't find it but would get back to us within a couple days. The deadline came and went and still no letter, they then claimed that they were working with the Deputy Director of Public works to resolve the issue (I'm not sure what they would do that would supersede a decision by the zoning board). We asked for a price reduction to cover the cost of repairs, which they verbally agreed to (again all through their agent). A few days later when their time was up the seller just flat out said they hadn't heard anything from the city and that they were no longer going to agree to our price reduction, but that the seller would repair it themselves to my specifications. Since they've lied multiple times at this point, and di not do the work correctly the first time, I am not inclined to make any deal that involves them performing work on the property.

At this point the deal will very likely fall through, I'd value opinions from anyone who has faced similar situations. I'm considering filing a small claims court for my expenses prior to discovering the zoning variance, which include inspections and quotes from contractors for initial fixes that were needed (which they also knew about and did not disclose). At this point I'd also like to see about adding in time, travel and other missed opportunities, though I'm not sure small claims would be ideal for hashing these out. I do want the house, it's rather hard to find anything in this particular neighborhood, which I put significant value on. Any thoughts on how to move forward would be valued.