My answer is: doesn't matter-- they'll seek to avoid the conflict and I bet for $2500... they'd pay. now the real question in the OP's case is "is a search of water department's records USUAL AND CUSTOMARY prior to title policy writing and closing on her jurisdiction?

Looking to buy wholesale deal in Charlottesville, VA, my daughter going to school there in the fall, and wants to buy a house, and work on it the summer prior, we are experienced investors in Indianapolis

And if you're wondering about demand for that house @ 499k, 40 units in this development came on the market as part of the next phase of this development a week ago, all but 4 are pending and most didn't even hit the public market but were scooped up prior to.  

In the past on a different property I've called the lender and confirmed it is okay to do this in order to not have a due on sale clause prior to quit claim deeding it into an LLC.I've heard sometimes the lender will say you must refinance into your LLC in order to quit claim deed it to not trigger the due on sale clause.

--Be aware of your FICO score and boost it prior to going to speak to a lender, even with a HELOC or a DSCR lender. 

Of course the seller knows the risks and obviously should consult someone else prior to accepting an offer. 

New York has already made checking someone's background for prior evictions illegal.

For instance, let's say you do the rehab and go to rent it...considering the relatively low value of the property, it's reasonable to expect that the tenants will have low or no credit, they may be unemployed or on income assistance, they may have minimal employment options, and/or they may have a very spotty history with prior rentals.

It is good that you are checking the areas prior to purchase. 

Section 121 exclusion you are referring to asks: Did the taxpayer live in the home for 24 months of the prior 5 years?