Some material defect you didn't plan on or maybe something that comes up later down the road.

If there are no obvious defects, I wouldn't be too concerned. 

Just use some defect in the property under that clause and you will not be liable for anything

In my town home that I rent now, but when I lived in it the HOA decided to sue for construction defects and everyone was assessed $22K!!  

It's generally, and you seemed to have confirmed it, a procedural problem/defect in process that was brought to their attention.  

Assignee further agrees to hold Assignor harmless from any deficiency or defect in the legality or enforceability of the terms of said agreement.

I'm not a lawyer is this is mot legal advice and every state is different so check in this but construction defects have a 10 year statute of limitations so if the leak is because of the more recent work the contractor will probably be on the hook.

It's equally likely that the seal gave due to age or manufacturer defect.   

They could have found defects, etc. and lowered the price during contract.

During your ownership you can order property inspections to manage its condition and help mitigate any physical defects that will be a detriment to value.