Issues With Tenant Before Move-In Date

[Michael Otis]

I bought my first investment an up-down duplex in Des Moines 7 months ago and was going to live in the bottom unit and rent out the top unit after a complete renovation. Work has since moved me out of state but while trying to rent the upper unit, a woman inquired about both units. The upper unit for her mom, dad and brother and the lower unit for herself. The bottom unit needed some work because I was going to renovate it myself and she wanted it in a month starting December 1st. So I threw down some new carpet, vinyl, toilet and got it ready to go. I just handed them off their keys yesterday and flew back. She was constantly trying to find things to complain about as I was handing her keys, as was her boyfriend (I'll get to him in a moment). I had my contractor go out there and fix some things and she gave him a huge list of "demands". Now she's telling me that her "boyfriend" isn't her boyfriend, it's her husband and she was hoping he could move in and he has a felony record from about 8 years ago and some misdemeanors in-between. I already don't like the feeling of this as they're trying to hide things from me and bringing them up after they've signed the lease. I also said they could move things in before the 1st but not stay there, low and behold my contractor was there this morning and said they slept there and were there all day until 3 pm when she had to go to work. They're only signed on until July 31st because of off season, the property is right next to a college and have been getting inquires for next fall.

Any ideas? I feel like this is pretty ridiculous and the lease hasn't even started yet. I need to put my foot down but how hard? If I say no to the husband living there, which I don't think he has a job, do I make it fervently clear that if I found out he's living there she will be evicted? Not to mention the rest of her family is living upstairs in the other unit. If I do let him stay, do I up the rent and security deposit?