I suspect that the owner is in default and anticipating a foreclosure proceeding happening soon. 

Most contracts should call for the seller to provide free and clear title, so any back taxes, judgments, or liens would have to be paid out of seller's proceeds (or pocket) at closing. 

I think it is FOOLISH because a landlord tenant judge in court might call the lease not valid and call it a disguised sale if coupled with an option to buy.Here is the landlord tenant law in BC Canadahttp://www2.gov.bc.ca/gov/content/housing-tenancy/...A conversation about rights to occupy - being an occupant not a tenant - http://www.sjto.gov.on.ca/documents/ltb/Interpreta...

How to proceed in this case ?

There are 3 pools, tennis courts and it is a beautiful park-like community.

Hey there Detarus, coincidentally or not, I just read about you in a basketball article, you're playing some Pro-Am at the Courts, right?

It will include late charges, attorney's fees, court costs, etc.  

It appears this bank will not proceed unless you fix the drywall.

I plan to buy, 51% own, remodel, rent homes and offer a minority ___% interest to hard money lenders secured by the following: 1) their holding a first mortgage and 2) quarterly loan  ___% interest payments and 3)  ___% share of annual depreciation and 4) ___% share of sale proceeds at or before or near year eight per market then.

Maybe ask for an official appraisal BEFORE proceeding?