Not disclosing that fact is simply another fraudulent act and inducement made to the contrary is another infraction.

We actually terminated their lease and we don't have to cite any specific reason in NC, we just have to give 7 days notice, but we did let them know that they had three clear lease infractions. 1) Drugs are not permitted 2) they were smoking on the property/in the house and 3) their renters insurance had expired. 

Advise your tenant to keep a written journal, with dates, times and 'infractions'. 

go to the Planning and zoning office to find history of infractions, any prior inspection reports, Utility history. 

I'd keep it simple, Application denied.Your going to have to make this type of decision on each applicant.Do you have a set criteria for your rentals.. credit score number, income = like 3 times the rent, verifiable rental history,, should show deposit returned , no lease infractions... if deposit wasn't returned what was reason, was lease term completed..  

Give her lease buy out option mutual termination and be done with it if she can't come up with that then .. you'll have to either fish or cut bait.. meaning,, fish for the lease buyout,,,,, cut baits is just say OK you have XXXX days to move,, if i see the guy here I'm writing up a lease infraction and will file for cause for unathourized tenant..YOUR THE BOSS ,, your rules.. 

First not sure what is confusing about the situation.It is listed on MLS being sold by HUD.This guy bid on it at HUDHomestore and got it accepted (Either he is a HUD approved agent or is working with one - hence his thing about not everyone can bid).Sent in the paperwork and his $500 deposit and now is trying to find someone to sell it to before he closes (and you have to close on a HUD).The ad the OP has didn't have any text that I saw so don't know what it said, but most likely there was some technical violations in advertising but that is a minor infraction that has nothing to do with the question posed.As to the question about it being a viable strategy...

(not always good)Either way, you need to make sure that you are always complying with the HUD rules, even a minor infraction can result in a delay of the entire rent for all the units.

Tenant is in the condo about 30 days and so far has had a few major infractions resulting in ban from public facilities and assessment of additional common fees.

You can check for involuntary by calling the municipality and ask if there are any code enforcement, unregistered permits, vacant registration, condemnation or demolition infractions.