Siding will generally be rotted if it needs to be replaced or have other signs of visible damage. 

It won't rot out. 

I've had better luck representing myself buying AND selling real estate than working with these jokers.The house had major foundation damage and a rotting roof sheathing as well as asbestos and electrical issues.

Inspection came back today with only nominally high radon, those appliance issues, and other minor stuff (rotting post in deck, etc). 

My life just changed and it no longer made sense from a ROT perspective**

And if he does change out the floors without showing us how they look underneath how are we to know if the joists/supporting structures were properly assessed for rot/mold if he covers it back up before anyone gets a chance for it to be assessed?

The siding was rotted as can be seen in the pics.

Sadly, we are 2-weeks behind on our renovation (#1 above) due primarily to scope creep ... we had to replace 28' of external wall: 12' due to rot from a leaky penetration for a though wall air conditioner; another 16' due to improper framing when the unit was first converted from a garage/workshop into an apartment {long before we bought the building}.  

The problem I could see by being a hard a** over this, is that then maybe there's a leak under the sink and the tenant is afraid of calling you about it, assuming you'll charge them for a plumber or something, and in the meantime, your floor is rotting.

Both bathroom are dated from the 50s, blue/pink tile throughout and looks like some dry rot next to the showerhead Tile looks like its bubbling.