The regulations will outline all the rights of landlords and tenants and by doing so outline what can and can not be included in a lease.

I've attached the statute for your state that outlines what a tenants security deposit can be used for:§ 42-51.

@David Faulkner and @Michael Swan you have both outlined your end games so I thought I would share mine.  

You did a better job of addressing OPs question of where in the law does it outline that as discrimination.

But in generaly your loan covenants will outline all of this, any reporting requirements necessary, notifications, etc.Generally, the lender will want you to replace management that is not working, and has every incentive to want that. 

@Nzinga Young I respectfully disagree completely with your post and I will outline some of the reasons why.1.

@Brian Van PeltThe course of action you have outlined is exactly what I am going to undertake.I appreciate everyone here helping me flesh out the situation and figure out the way forward

How would you recommend outlining a DD period to close with cash fast and how many days do you recommend? 

Have discloses in writing that outline the risks in detail and advise the seller to seek both legal and tax advice. 

First of all, you should be getting an estoppel certificate, signed by seller and tenant, that outlines current rent, current deposit (even if its $0), and any current outstanding oral agreements.