The lease is standard boilerplate claiming both individually and collectively responsible for the rent.

But they can claim that they did not know they need to pull a permit? 

I have not made an issue of it, but I have informed him I need documentation validating his claims.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris scam and/or Morris Invest scam for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it.

See if your value is anywhere is close what the seller claims the property value is.

Personally, I would hold my nose and redo the flooringJust for fun after closing, I might consider a small claims action AFTER closing to recoup the costs and additionally name the Board member personally

I have seen properties on there for months before they disappear and the lender files a claim with HUD. 

With the claims they make, they should be able to prove with documentary evidence that said claims are true.

New tenant claims that they replaced the bulb in the downstairs bathroom and it flickered and so did the lights in the hallways outside of the bathroom.

If there isn't a quick rebound in this sudden recession, then in a few months we'll see homes hitting the market, likely at discounts, especially in middle-to-lower class areas where jobless claims hit hardest, nest eggs are smallest, and "emergency funds" are nil to slim.