The violations include pulling construction or electrical permits and the fines are seven figures.

That basement would be awesome if permitted to bump the ARV and add value.....  

I have asked standard documents through my attorney to the seller's attorney - leases, insurance with any claims in the past years, service contracts, any permit violations, etc during attorney review.

After confirming with your local laws, if you are permitted to require it, I would also require to be added as an additional interest on the policy. 

Make sure your buyer could get a building permit on it and utilities to it. 

These are true tiny homes on wheels, legal to take on the road without a lot of expensive permits unlike some manufactured homes that are 12 feet wide.

Do we run into any issues with having to not getting permits if the structure is already there?

If I were to rent out the second level, but the house is not permitted as a multi-family or mother daughter,  could I be personally liable if there was a fire?  

The owners have made additions to the property and didn't get the additional work permitted when they did it.

yes. i have spent weeks working on this deal. the seller is ready and my workers are too. already got total cost for all required permits for my area, also my comps are good.