There are several STR's on AiR B&B that do not abide this; are they likely operating outside of permits or does the county make exceptions?

This would mean your class of tenant causes more damage than expected, or hail destroys your roof *every 5 years* or something similar.

I fixed the roof myself out of my own pocket.I called the insurance broker  and he straight asked me if there was a damage after the hurricaine, so I said a tree fell but I fixed it myself out of my own pocket.

Also there are rules with past due notices etc. as well as it relates to this.If you were to damage someone's credit and then find out you were not compliant, you could open yourself to a lengthy and very costly legal battle. 

the kitchen,fridge and bathrooms are disgusting and it is damaging the properties.

This is my first extensively water damaged home that I may purchase.

Our counsel previously advised we are legally entitled to a greater amount including all lost rent until the home was re-signed, cost of lock-out, cost to clean up house, physical damage, ect.For context, this is a solid house in a decent neighborhood and we never had prior issues with the tenant. 

For example, what if a tenant leaves with significant damage and it takes you $20k and a few months to make the unit rent ready again.

Most people taking in foster children are good, honest people that will take responsibility for any damage done.

I was worried about it, but so far no damage or stains and we allow dogs.