We offer a little low to see how they react.

Some places also defer licensing to the relevant industry regulatory body (etc: EPA for HVAC).

I'd call it, 'unethical and illegal'Do the right thing for the workers and future home owners: Test honestly, react appropriately. 

Maybe if the land was given to you, and the insurance and taxes were very low, and it was right on a body of water?

It does not react well to water......I would just paint it to seal it...

How do different governing bodies classify this differently (bad government jokes ahead)?

This means that only a governmental body, like a state attorney general, can sue over HIPAA.

Next item to know is there is several different constructs for Common Interest Communities, and while most just use the blanket term of "HOA" to define the organizing body, the legal construct varies wildly.

No body better than person in the mirror. 

Let the cops handle it as you never know how a parent might react to some guy asking about their kids and following them. that is scary **** and you might end up being arrested - not them.