There are work arounds, you'll need your attorney to draw up an acceptable compromise with the lender. Basically they hold back aprox 150% the estimated cost to do the repair work from the closing with an agreement that the work be done after closing in a timely fashion, after the work is done & approved by the local authorities etc. the remaining balance is returned to the lender from the short sale.
Either way they'll have to address this situation if the property is to sell, either now or in the future. The contract terms for something like this will need to be drawn up by an attorney.