From what I understand outstanding tax liabilities (even with IRS and not just property tax) are another big ticket item that you have to be careful of.  

Just remember to keep the two documents (lease and option) separate;  one should not refer to the other.Option fee should be non-refundable, however if you want to credit the option fee towards their down payment WHEN THEY BUY, you could structure it that way.Personally, I would be very careful about how you go about 'crediting' $xx of monthly rent towards their down payment. 

Go through it carefully, or ask an attorney for help.You want to show that you're serious about closing when you submit an offer.

Monthly expenses will always be low when you don’t take care of a property, which was clearly the case. 

Be careful about posting addresses on here in public.

Really the only way they don't pay rent is if they don't have money in their account, which is something your screening process should take care of! 

Tenants are also more careful with usage if they are paying and they are in the tenant's name. 

I made my title company aware, and got it taken care of. 

Maybe the previous owner took care of it.

Will the title company take care of the Promissory note as well?