@Gerry RaeThere is a thread herehttp://www.biggerpockets.com/forums/93/topics/1847...Arizona RegsDisclosures in a Transaction:In accordance with the Commissioner’s Rule, R4-28-1101 (B), a licensee participating in a real estate transaction must disclose in writing any information the licensee possesses that materially or adversely affects the consideration to be paid by any party to the transaction, including:Any information that the seller or lessor is or may be unable to perform.Any information that the buyer or lessee is or may be unable to perform.Any material defect existing in the property being transferred.The existence of a lien or encumbrance on the property being transferred.In accordance with the Commissioner’s Rule, R4-28-1101 (E), a licensee shall not act directly or indirectly in a transaction without informing the other parties in the transaction, in writing and before the parties enter any binding agreement, of a present or prospective interest or conflict in the transaction, including that the:Licensee has a license and is acting as a principal.Buyer or Seller is a member of the licensee’s immediate family.Buyer or Seller is the licensee’s employing broker, or owns or is employed by the licensee’s employing broker.Licensee or a member of the licensee’s immediate family has a financial interest in the transaction other than the licensee’s receipt of compensation for the real estate services.In accordance with the Commissioner’s Rule, R4-28-1101 (F), a licensee shall not accept compensation from or represent more than one party to a transaction without the prior written consent of all parties.NOTE: The above listed disclosure issues reflect only those requirements in the Commissioner’s Rules.

Defects that should have been discounted or created purchase rejections.

Hire GC/subs with liability, work comp, commercial auto policies; should include coverage for "projects and completed operations" to cover my cost to bring the property to completion if faulty workmanship, defective materials, carelessness, or accident occurs; covers defects after property is sold; should also cover theft of materials/tools so I'm not out the cost of a stolen pile of 2 x 4s (they buy everything).Questions: Is "Hazard" insurance for fire, wind damage, vandalism, etc. covered in vacant building coverage?

How many years ago was it that there was a huge recall on defective drywall? 

When you go to resell, any good buyer attorney will investigate the foreclosure, and any defects really could cause problems for you.

The issue with structural defects is that it is a general term.

Well, that is the issue with tax sale properties in general.....if the could not serve proper notice, the sale is defective.

Like Matt M suggests, the supply end could increase if the construction defects law is changed but at this point there is no housing being constructed for sale that is below the media or average home price.

First off it is used, so even if it has a serious defect, you can't even blame the manufacturer (easily).Second, if a tenant gets hurt on this, the landlord is going to be liable.

Also, make sure the lot doesn't have costly defects you'll have to pay for to remedy.