You would likely have to take it all the way to court if you wanted to fight it, but it's not typical that you have to pay the fee if you were acting in good faith or made a mistake.

@Tosha Revere you're making the common mistake of thinking her feelings are more important than yours.

All I'm really saying is ... prepare for the worst.  

The worst part is that it's a great time to work on houses, but only if we can permits to do it.

I feel that it is in a good enough neighborhood that worst case scenario I could still rent it for my anticipated mortgage pmt and take a small hit each month until the recovery happens.

We were talking worst case scenario.

Seems like you have a solid base to get started so I think you're going to kill it and you're in a pretty forgiving market so get out there and make mistakes brother.

So worst case is a bit of their profit sharing gone, and some awkward phone calls to investors.   

All is well and good if I own a great A class apartment building, but if I overpaid and my worst case pro forma plan has me pushing rents 3%/yr to meet the debt service when the Interest Only expires, the next 6-12 months are going to be rough.

And if so are you willing to take on that financial and potentially legal liability should the worst case be realized.