For me there was no excuses I'd accept, you need to see inside to verify condition and run repairs.

So my PM just sent me a message and said there are no other options besides replacing the unit.

No pets. 

Or do I have literally NO tax obligation from the sale?

In my condos, I hold: they are pretty new, with healhy equity already, and solid, with no Special Assessment at the horizon.

If the renovation cost makes the total purchase creep up very close to the new build, I think it's a no brainer. 

There is no telling what repairs or unexpected expenses will come up.

I recently bought a flip house and upon starting on the house I was shocked when we had no water.The neighbor of the property was sharing his well with the house, he and the deceased owner had a verbal agreement, nothing was filed. 

We said no because it seemed like it was going create a big headache for us and we have a 60 days to occupy.

Be very very careful with a guy like this....But to answer your question - No you cannot dodge the reporting of a large sum of money to a Contractor.