Usually the docs will say something to the effect of "...except in the case of negligence on behalf of the Member...."  

Yes, there may be clauses releasing the inspection company of liability, but a jury or mediation board probably would side with you if you show there to be complete incompetence and negligence with this 'inspector'.

Negligence would be doing nothing after being made aware.

I'm willing to carry the second because I will net so much from the sale.Rental value of each unit is about 700 with 155 in dues; taxes and insurance are negligible; allowing for vacancy, management, and reserve fund, and debt service, I net about 150 per month per unit.The bigger question: should I sell with that much gain and 1031 it into, say, a commercial building or a larger apartment complex, or should I hold?  

The law of negligence requires only that you do what a reasonably prudent person would do.

In my opinion, the previous unit owner was extremely negligent in not stopping, &/or reporting some or all of these problems.

If a note is found to be out of compliance, errors or negligence of any previous note holder, the note may not be a valid debt or collectible and you'll be wanting that seller to buy it back.

For anyone to be culpable for any loss suffered by another, they must have acted in a reckless manner or have been negligent, acts of God such as  storms or natural disasters are not events mortals are culpable for, speak to your clergy for guidance. 

(I've walked the whole building but a couple floors at that time I couldnt do much exploring on other than the hallways.As for TI's --I think on each floor it would be negligible, (havent been through every one with a fine tooth comb) however almost all are built out fairly nicely - may need some paint or carpet at the least.  

Detroit's death spiral was created because they had negligible middle class and upper class areas to have a tax base and massive areas of poverty which required massive expenditures.