@Devin Marlowe I'd probably walk at this point ... you can always poke at it later.If you are intent on pursuit, you could make it a condition of any offer that all zoning, work order and code compliance issues be resolved prior to Close.Now that you have had this discussion with the City and, I presume, conveyed the information to the Vendor and his agent {hopefully you asked the City to put it in writing - to help you keep the list straight.  

It isn't really resolved until a "finder of fact" ( a judge) makes a determination and then it can still be appealed.

Get the first multi-family stable, all rented out, maintenance issues resolved.. before moving onto another property to keep your sanity.    

If that resolves into a No Fault Eviction,  the seller pays the relocation fee(s), sometimes as high as $8k per door.

Eventually it was resolved, but I am very cautious and run title searches before paying the balance.I am dealing with a purchase now where the underwriter will not issue a tittle policy because on a previous transfer of the property the notary, witness and the seller had the same, very uncommon, last name.

Any idea how to resolve it? 

A demand letter should be sent before a lawsuit is filed.I would also try reaching out to the contractor again and let them know you would really like to resolve this without a lawsuit, all he has to do is return your money which he is not entitled to keep without doing timely work.Finally, are GC's licensed in your state?

Have the seller draft and sign a nice letter stating her request, along with a sidenote stating that she will contact the state bar association if this matter, which she has been attempting to resolve for months, is not addressed in the next week. 

If it is unable to get resolved, contract will terminate in 14 days, assuming there is no pending contract."

Oh yeah and I forgot to mention that when the section 8 tenant complains to the case worker about the issue section 8 will do an inspection.They will give a notice to you citing the problems with the property and a time line to fix.If you haven't resolved the issue by that date they will put a freeze on your monthly rent payment.So if you make 600 month they will pro rate the numbers of days until you fix the issue and then give you that rent money.They do this at least in Atlanta to make sure the landlords are maintaining the property and fixing issues.If the landlord doesn't the only thing that gets the landlords attention is not getting the rent payment from section 8.