There's a special provision in our local code that you can only install them with petroleum jelly as a thread sealant (just like cleanout plugs), no thread seal compounds.

You can mitigate that with a masonry sealant, but if bricks have spalled deeper than the mortar then they need to be replaced.

Oil based paint and sealants are what I use.I would not advise documenting there is lead paint, unless you have tested it and that test was mandated by the local inspectors.

The inspection report guy said that he would firmly need the entire siding redone because of the water damage that came from having an incorrectly installed roof (no lips on the ends, no sealant) and no gutters on the majority of the ends.

Tiles make more sense in bath and kitchen and hopefully they still look durable when sell if you protect the caulk gap with water sealant.

Or you try the sealant with sand / grout to match the grout. 

Does your contractor use a sealant behind the tiles?

If you go this route, you will need to disclose the presence of the asbestos to any contractors or service providers (cable, telephone, hydro) who may have to drill through the hidden asbestos siding.Finally, you could give it a fresh coat of paint - and perhaps apply a sealant - and leave it.

Caulk sealant in the crack and build a little concrete curb/slope over it and it does the trick most of the time.

Not sure about just using a sealant.