That have an exception in the title regarding the encroachment issue, but it shouldn’t prevent you from closing.The worst case is if the building were to be destroyed by fire or other means (usually the 50% rule is applied) the rebuilding would not be allowed unless in compliance with setbacks.  

ACV - if a tree crashes into it and destroys it or it burned down tomorrow (say, a tenant leaves groceries on the stove and it gets turned on or they plug in cheap phone charger and it catches on fire - both problems we've had), can you rebuild for the $180k?

Ofcourse the tenant wont agree with raising rent or pitching in for utilities etc especially when their lease doesn't require them to till 2023. 

So worse case you're looking at 2 months unless they file a paper affidavit (they wont but its possible).

Other than that if they are paying on time and not destroying the place then leave them alone. 

Carpet is depreciated over a five-year period, what happens if your tenant destroys it in year two?

I wont bother getting educated on that then.

I was planning on at least replacing then flooring as good faith and to justify the rent increase but seeing their living conditions (not the cleanest) my wife is worried that if they stay they will destroy any upgrades we do on the home.

My perspective on this is as a married DIY landlord in Pittsburgh, across the Commonwealth.I've watched this life wear people down to nubs, destroy seemingly healthy marriages, even cause the children of the DIYers to try to commit suicide.

My damages aren't a sum certain, but WOW -- I start off on Airbnb basically with my reputation destroyed; that's worth real money.