So pretty good argument that these conditions would stick under the principle of freedom of contract, regardless of whether the property code would generally lead to a different outcome unless this is deemed contrary to public policy for grown-ups to agree to this (doubt it but maybe tenants are selectively handled under the case law roughly like children in the sense that the average tenant may be deemed by the courts as essentially lacking the capacity to agree to modifications of the security deposit conditions that may disadvantage them).Also, "Abandonment" is a defined term:(3) "Abandonment" occurs when all of the following occur:(a) all occupants have vacated the Property, in Landlord's reasonable judgment;(b) Tenant is in breach of this lease by not timely paying rent; and(c) Landlord has delivered written notice to Tenant, by affixing it to the inside of the main entry door or if the Landlord is prevented from entering the Property by affixing it to the outside of the main entry door, stating that Landlord considers the Property abandoned, and Tenant fails to respond to the affixed notice by the time required in the notice, which will not be less than 2 days from the date the notice is affixed to the main entry door.But as is occasionally the case in this lease, terms are defined but then used in a de-capitalized manner earlier or before, which permits the legalistic argument that the de-capitalized use of the term is broader.

(formula = (Market Rents per appraiser * 85%) > (Principle + Interest + Taxes + Insurance + PMI)An appraisal will need comp's similar to a property like this, which I believe will be tough to find and am concerned about not being able to get a loan because of it. (3) Are there ways around this?

These are not traditional mortgage notes, but the principle is the same. 

But why, besides getting a better credit score, wouldn't you just take the ammount of money you would have spent paying back your LOC loan, and just pay that directly to your principle each month, to avoid the interest rate you pay on the LOC.Ex: I take a $10000 LOC out and pay that towards the principle.

Yet, take a look around and you don't see many cranes i.e. apartment new construction, creating increased demand on a limited housing stock...no "relief" in sight.

MANAGEMENT OF A STATUTORY TRUSTThe Act is intended to give great flexibility to parties in structuring their trust and maximum effect to the principle of freedom of contract.

Now that is time to buy, tenant can't qualify due to debt to income: he has 20k+ credit card debts that is not able to get rid of (he is paying interest every month, but has no extra money to pay principle down) and has 2 car payments ( I guess he could sell the cars in the period when he qualifies for the mortgage). tenant lived in the house 35 years!

Lesson learned: Assume the worst if you’re buying a house sight unseen.

Buying half a million dollar property sight-unseen is a little risky, even for the most hardened, experienced investors, IMHO.  

your house payment does not all go to principle  some of is interest,  some of it is taxes, and some (very little) is Principle.