This is mostly a conceptual question.

Is it possible to add negative effects to perks, then have a later perk remove the negative effects of the earlier perks? Obviously it would be a lot of condition handling, but would the engine allow this to anyones knowledge?

i would guess yes, although as far as eleminating the negative effects i imagine it would be easier to create a second identicle perk without the neg effects and swap them instead of trying to modify an exsisting perk through a script

I didn't think of that. Thank you

On that note is there a limit to the number of perks you can add to a tree? I will mess around with it when I get home to test, but if anyone knows I would appreciate knowing the limit if there is one.

Depending on how you wanted to approach it,
For example if you wanted the perks to be on the perk tree, create your 2 perks (Perk1 and Perk2). On Perk1, you could create a perk entry for your negative effect that has a condition (double left click perk entry to add a condition). This has to be on the specific perk entry and not on the Perk

The condition would be on the perk owner tab with the following condition:
Target - Player
Function Name - HasPerk
Function Info - Perk2
Comp - ==
Value - 0

With that condition in place, the negative effect would apply until you had Perk2