Tenant said the flapper valve on the toilet sometimes stuck-she paid the bill and arranged things with the water company...but in this day and age I'd like to think the water companies would alert users if there is a massive and continuous spike in water consumption.

I know many companies that do this. this would not be a security as long as you they are not getting profits from the deal and are financing the transaction as a standard loan and recording a deed of trust.Some good info here on a note:The Court provided four factors to determine if a note sufficiently resembles the types of notes that are not classified as securities.

Can you imagine taking the time to find a new place, pay the despair, set up utilities, arrange for a moving truck/company, packing and unpacking everything, changing addresses everywhere, etc etc etc.

I am trying to be understanding since this is a difficult time for the family and they certainly have many arrangements outside of the sale of the house to consider.

If the tenant does not pay and doesn't make a payment arrangement with you, then you proceed to evict like any other nonpaying tenant. 

Their management agreement is win-lose arrangement. 

Are there any verbal agreements or arrangements between the current Landlord and Tenant?

You might want to do a little research on what are called pay for delete arrangements depending on how old your collection accounts are.

However, enforcement of due-on-sale clauses can vary, and some lenders may not immediately call the loan due if payments are current and the sale does not trigger other concerns.Disclosure to Buyer: When selling a property "subject to," it's crucial to disclose this arrangement to the buyer.

If it is because the tenants are not home, then you need to arrange to be there.