I live in CA, where we have very strict fair housing laws (though most fair housing laws are federal, so you're subject them to).

Damages would strictly be any costs paid to the trustee above your refund. 

To determine if the expense should be classified as a capital improvement or a deductible repair, the context of the expense is very important.An example is, if an item of expenditure is part of a general plan of modernization, renovation or rehabilitation to equipment or other business property, it typically must be capitalized even though on its own it would be currently deductible.According to IRS Code, expenses that you must capitalize are those that:Materially increase valueSubstantially prolong useful life (including replacement of deteriorating assets)Adapt the property to a new or different useHowever, you are allowed to deduct expenses and fees for routine maintenance and repairs that help keep the property in efficient operating condition.

The lender then has to follow foreclosure proceedings as specified in state code.

I'm in Texas, rules are not too strict. 

My understanding is that there is no code that says knob & tube wiring must be replaced.

I was also made aware that a future addition to the project would have to be undertaken to bring the stairwell into the cellar up to code. 

These are professionals with additional training and a stricter code of ethics.

For investors in the area, what are your thoughts on the zip code 33311?

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