This could have easily been solved by getting an updated survey. In Texas for about $350-$400, it would have show where the property was over the minium setback line by the 363 ft. The buyers could have then sought to get a variance from the city or if during the Option Period, cancelled the contract. At least they would have known about it prior to purchase, regardless of whether there was a code violation or not. At least the realtor should have checked it out. Either way, the $400 they would have spent for a new survey would have possibly saved them the $150,000 worth of construction removal later. Even though title would have probably excepted to the 363 ft. over setback even if buyer still purchased home after knowing about the setback and violation or possible violation.