When I visited to take photos recently there is a small deterioration to the walkway at the end but its no different than any other crack you might see on a city sidewalk. 

--------LANDSCAPING/YARD CARE.Regular landscaping/yard care (mowing, edging, trimming, fertilizer, weed control) will be provided by _______________________.For all Tenants:a.Tenant agrees to keep yards, walkways, patios and decks clear and to keep premises free of junk and debris.b.Tenant accepts liability for all landscape damage and/or replacement of such, if caused by neglect, abuse or lack of water.c.Tenant may plant the beds adjacent to their dwelling to their liking, but only with those plants that are of appropriate size and type for the beds.All plants brought or caused to be brought to the property by Tenant will be cared for by Tenant.d.Tenant agrees not to cut or prune trees, hedges and shrubs.This will be Landlord’s responsibility.e.Tenant agrees to properly dispose of all plant debris and agrees to not leave such on the property.f.Landlord will consider special Tenant requests for planting and removal of plants, shrubbery and trees, but reserves the right to determine the make-up of the landscaping.For Tenants of single family homes only: a.Tenant agrees to mow, water, and keep the grass, lawn, flowers and shrubbery thereon in good order and condition, applying fertilizers and weed retardant as needed. b.If there is a failure of Tenant to keep the landscaping in good order and to follow these guidelines, Landlord reserves the right to hire a landscaping service at Tenant’s expense (after a 10-day notice to perform covenant).c.Landlord reserves the right to restore the landscaping to its initial condition, as it was at the time Tenant began occupancy, or if improved during Tenant’s occupancy, to the level of such improvement.

Maybe some pallets and temp walkways and put a washer/dryer down there if the space allows.Cheapsest immediate fix would be to diagnose, say you are going to change it, offer an appropriate discount for the loss of whatever amenity it is and with new lease just use as storage or as above

Since it's worth $1.3 million and she bought it for $550,000 and she owns it now with no mortgage, It sounds like she needs to calculate if she (or they when they get married) walk way with more proceeds from doing a 1031 exchange and the depreciation recapture vs. using the $500k exclusion for primary home owners)?

I don't have any experience flipping, but here's a few ideas;Brick walkway to the front door with brick planter(s).

Properties usually have security lights, walkway lights, landscaping lights, etc. 

Then there is no way they can argue that the lease does not state they had to cut the grass and keep snow clear of their walkways.

I love the idea of using it on my garage floor.PROTECTS• Fences • Gates • Decks •  Foundation • Ponds• Patios, Porches & walkways • Basements •  Bathrooms • Garage floors • Dog Runs & Kennels • Wheelchair  Ramps • Stairs • Swingsets • Patio Furniture • Sheds

I do believe this house is worth more than we are paying, and that if he relisted on the market, he could get 10-20k more and he possibly knows this and is dragging his feet as well, hoping we walk way.  

Underneath the extension is an outdoor "alley" walkway from the front yard to the backyard--i.e., there is nothing solid underneath this extension.