The way I understand the rules are that if your in a deficiency state, generally you will not get the waiver language.

Is this stating that if a home owner has received a tax deficiency for a house that was short sold, but lived in the home for 2 years, they don't have to pay this?

Mostly saying that the tenant has the responsibility of "keeping the leased premises free of inoperable vehicles and machinery...to keep the property mowed and free of trash or clutter and in like manner of surrounding and adjacent properties....that the tenant shall immediately notify landlord in the event of any plumbing, electrical or other physical deficiency which may pose any safety or health concern to tenants or the public, or cause damage to the leased premises, or lay waste to the leased premises.

Since you mentioned that you'd be willing to pay any deficiency (the lender might require a promissory note), that improves your chances of getting it approved IMO.The answer to the question "Why did you turn this into a rental?"

The banks didn't used to do this but with the short sale streamline process it now says the government and anyone else can be notified of the info you give the bank.If the short sale is denied the bank can later use this to pursue a deficiency.

He couldn't believe we get rid of his mortgage debt and get the bank to waive their right to a deficiency.

If a Home Inspector detects deficiencies, they will tell you.  

All were warned of any deficiencies in this area.

There are many causes that can be cited for the symptoms people blame on mold, such as hypersensitivity, allergies, viruses and deficiencies of the immune system.

@Roger Poulin Suggest you discuss with your attorney the merits of getting an Order for Publication which would encompass all of the shortcomings or deficiencies of due process that your judge has so far noted.