30 gallon of water passed though winterized house

[John Lee]

I'm in the inspection period phase of purchase a short sale property in Jacksonville, NC. The house is built in 2006 and winterized since October 2017. I have the electric and water turn on recently. The water company said that when they come to turn on the water, 30 gallon of water passed through the meter and they have to shut it off. They said that i have to have the plumber come and bring the house up to code and install a handgate valve. 

The house was build in 2006 I don't understand why it was not up to code. Should i continue to put down sunk cost to get  the property inspected or just back out of the property now?