Help! My lawyer says I can't evict them ! A true nightmare !

[Ewan Tong]

Let me take a deep breath before telling my story...

I bought a bank-owned two-family on auction for 460K, 100K-120K below the market price. Before the auction, I knew the property was occupied but I didn't know the identities of the occupants. My original plan was to talk to the occupants after the closing, asking them either to sign a Tenant At Will lease or leave the property.

The next day after closing, I went to talk to the occupants, but they refused to talk to me but referred me to their lawyer. Here is what their lawyer told me:

Then, I talked to my closing lawyer, who immediately investigated into this issue. Here is what my lawyer told me:

I was shocked when I realized that I was in such a predicament. While I feel sorry to hear the crazy story, I feel sorry for my investment too. But I do have the following questions:

1. What if the couple intend to stay there for ever? I will be definitely willing to let the old couple stay for free for a few months before they eventually find a senior home that suits their needs. I try not to be cynical, but to my knowledge, there are at least three generations of their family members living in the two units. I suspect how motivated they are in "looking for a senior home." The two-family has 2 living rooms, 6 bedroom, and 2 bedrooms in total. I suspect how "actively" the children could be looking to place the old couple in senior home when the entire family could live there for free. What if they maliciously take advantage of me and stay for ever?
2. Are we landlord-tenant relationship? Will I be held liable for landlord obligations? We have no lease, no rent payment. In this particular case, are the old couple and I in a landlord-tenant relationship? Will I be held liable for landlord obligations, such as repair, safety, heating and etc. 
3. Should I buy homeowner insurance for this property? If the old couple fall due to uneven floor and sue me for negligence, would my homeowner insurance pay for that?
4. What should I do next? What is the best course of action you would recommend in this particular situation?

Thank you so much for reading my case and any feedback is greatly appreciated!