It is possible the previous owner, the listing agent, and the contractor who built the shed are all have the libility, even your buy agent.
1) If the owner did not tell the real distance of the distance, then listing agent should be waivered;
2) if the owner did no tell the contractor the permit requirement, then the contractor should be waivered
3) If the owner told the contract the city code claerly, then the major responsibility should the the contractor; but the preious owner still has some libility
4) if you buy agent was told the distance did not meet the city code, then you buy agent will have sole responsity
For real leagl advice, you should consult with a real estate attorney and determine what to do. The question is how much will cost to modify the shed and meet the city code, is it worthy?
