I agree with the below response. Construction defect lawsuits are incredibly common, particularly with condo conversions - which are prevalent in UTC.
Generally, you can get financing, but need 20% down or more in order to make it work.
The most likely outcome of a lawsuit will be either an increase in HOA fees or an assessment, I've recently looked for condos in UTC and I know the choices are skimpy. If your client is limited financially, then this is a scary outcome.
If your clients able to buy the home comfortably and have enough down payment and cash reserves for contingencies, it might make sense to move forward.