For me, though I would take this as a learning experience and work to remediate the issues and try to keep this tenant.

Would we be able to pocket the buyer commission to remedy the final sales price or closing costs?

Get to the bottom of your predicament and remedy that.

Remedial Action must be started within 24 or 72 hours depending on the situation and repairs must be completed within a reasonable period of time.    5. 

They definitely dropped the ball and Scott has worked hard to try and remedy the sutuation, although their loan structures changed in the middle.of my deal, and theres not much that can be done now.

After talking to my insurance adjustor, he advised to get details on HOA coverage b/c to remediate damage we need to go all the way to studs. 

We're facing an artificial contraction that can be remedied almost overnight(under 6mos).

If you're going to remediate a sink hole, you should remediate it right.

But in a state like Cali, you might be forced to get a professional remediator (probably should to be legal).

welcome to the world of insurance, where everyone is trying to one-up the other guy. this happens across the whole insurance spectrum and not limited just to home insurance. to the OP, shop around and get a new carrier, then start consulting with experienced roofers in your area on what you remedy could be.