You need to give a reasonable time such as 7 days to cure the issue.If he does not comply, contact the state department of finance which handles mortgage broker and ask them for further direction.That is not meant to be a legal opinion, you can run it by your attorney to expedite things.

@Kevin Seith Tear downs are more costly as mentioned by @John Moore there are usually additional costs for permits and engineering and you can't forget having to comply with all the current zoning rules like setbacks, off street parking, sprinkler systems, fire separation, density, lot coverage, and impervious surfaces.

I would like to get into flipping in WA state and am wondering what flippers do to comply with this law?

Check that out and make sure you comply with that.

The penalties from Austin legislators are stiff if they do not comply.

Is there a complied list somewhere?

I suggest you place the contracts in servicing to comply with those loan servicing requirements adopted.

While you only have to register certain rentals (built before 1950, I believe), you still have to comply with the lead laws for everything 1978 and back, including using lead-certified contractors or becoming certified yourself if not lead-free.

In our area regardless of what you call it the town will call it a bedroom and expect it to comply with code so unless the door is in the "den" here they want to see egress windows.

Best just to comply, go to a mortgage originator get qualified and do you deal if the seller is willing to finance it, I suggest you skip the lease-option and just buy it with a note.