As far as I know, in the rare event the bank makes it an issue, they have to allow you 30 days to cure, so you'd simply have to transfer them back.  

You typically will not get dollar for dollar in value; however over time you should recoup the cost and more by curing some functional obsolescence.

A cure period , late fees, etc should be addressed but a competent attorney should have a boiler plate doc that you can use.  

As for the smoking, refer back to your lease and make sure you have a clause that states no smoking and what the ramifications are. if so, he is in violation of the lease and give him a notice to cure or quit based on the specific lease violation.

A banker I am networking with to try and understand what is needed to finance larger projects (you would think it's the cure to cancer, irradiating smallpox, and alleviating poverty...) recently wrote this quote and I am sharing it with you as much as it's probably helpful self-reflection for any BP members, "many [entrepreneurs] rarely get a chance to spend time in that house because they are so caught up in being entrepreneurs."5.

Option as an installment sale, still has issues other than the IRS.12 months is not a "get round" cure, ATP still applies.Find a better buyer, greed gets in the way when a potential buyer has money, sellers just want to get their hands on it! 

Charging pet rent (monthly extra charge of $25-$35) is better than a pet deposit because you can use that to "cure" any damage pet may cause.

The homes have functional obsolescence especially with the window units and I agree that the value should increase once this is cured.

If you can identify those, cure them and reap the rewards. 

I like to use the terminology "Forensic Cost to Cure Disclosures Addendum and Exhibits" and list your "Cost to Cure" exhibits on a state official addendum form.