No biggie, check code with local municipal officials.

This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection. 

We will be hopefully making an official offer by the end of the week.

I have not had an official reappraisal done on the property, but I think the property will appraise for AT LEAST 450k, but I think higher.

Anyways, a few days I got a letter from him in my email talking about how this letter is their official letter of telling us we need to vacate the premises unless we pay like, $8,000 in fees. 

I forgot to mention that the house is condemned, but I haven't gotten the full story yet from the building official.

A landlord's written notice of damages must itemize the nature and amount of tenant damages, including any unpaid rent or utility payments, and must be accompanied by the balance, if any, of the tenant's security deposit not being claimed for damages plus interest.Did your landlord provide you with an official "written notice of damages" within 30 days of you moving out?  

Or does the hoa need to send a letter for them to be officially be breaking the lease? 

Suggest you call a loan official and show him photos.

It's truly like going back in time and the current town officials were completely unaware of all of this LOL as the old officials are now long gone and nobody was the wiser.