I remediated the tenant situation immediately upon closing and have managed it successfully since with that same tenant in place!

Has anyone else come across this issue and if so, how did you remedy it?

The cost to remediate is a total of $3,965." !!!!!!!

There are only a handful of lenders who do this well, from my experience.The mortgage lates should be remedied with either an LOE or by switching guarantors.  

If a house doesn't pass, the city is forcing you to allow a tenant to stay in an unsafe house until it's been remediated.

Here's what ME lease agreement stipulates for pests:(F) Pest control, after the first ten (10) days of the Term of this Lease, shall be the sole responsibility of the Tenant, including, without limitation, prevention and remediation.

DEFAULTS Tenant will be in default if: (A) the Tenant don’t timely pay rent or other fees and charges they owe; (B) Tenant or any guest or occupant violates this Lease, property rules, or fire, safety, health, or criminal laws, regardless of whether or where arrest or conviction occurs; (C) Tenant abandon the property; ....When Tenant is in default, the Landlord has the option to declare the entire balance (all outstanding balances including but not limited to invoices, rent, cost due to damages/abandoning the property) payable hereunder to be immediately due and payable; the Landlord may exercise any and all rights and remedies available to Landlord at law or in equity and may immediately terminate this Agreement.XVI.

I have clients at my W2 who didn't do this and are now paying environmental remediation companies (like the one I work at) hundreds of thousands to clean it up, by order of the EPA, even though the PREVIOUS owner caused the issue.

There are three ways you usually remediate charring.  1) Replace 2) Dry ice blast or 3) Seal (but not with paint)

It is not a problem.There are different remedies, including soaker hoses and other remediation items, to limit soil impaction, but piers and leveling are common.