There's absolutely no way I would pay a significant fee that was not contingent on performance of my due diligence.What would stop an unscrupulous seller with a property having a known major defect from dangling that stinker out in the market, attracting some unsuspecting and hapless would-be buyer, and then collecting easy, non-refundable money from them?

It's got an HOA annually of $325, move in/rent ready now with noting on seller's disclosure as significant defect, noted roof is 7 years old with commercial kitchen updates, playground area, etc.  

Until you have a signed purchase agreement with the seller, I see no reason for you to share the inspection report.After you have a binding agreement, if you choose, you could show her, particularly if the report indicated some defect that you wanted to address during the due-diligence period.

Lawyer stated if anything happens they would be on the hookAgain, totally irrelevant...title insurance simply insures there are no defects/claims with the Title/ownership of the actual real estate.

If I am "guilty/liable" is there penalties for this or is the notice simply considered defective? 

They'll miss many framing/structural defects and also many electrical issues.

@David Young As far as I understand it, this is not legal in Ohio, or, at the very least, the seller can be held liable for any damages that result from an undisclosed defect.

A seller can be sued up to one year for non disclosure of any defects.

Let's say the seller was dumb and paid cash for a property without ensuring that there were no title defects.

Back to any investment, operators matter, but I have heard of several projects (single family homes, condo developments, apartment complexes) that had fairly major construction defects that only arose 2-3 years after occupancy, but could be traced back to either poor design and/or poor craftsmanship, and were only a matter of time to be exposed.This article from Feb, 2021 talks about issues at 432 Park Ave and the construction and design issues causing major damages. https://www.nytimes.com/2021/0...