Need Help- Everything Done Wrong-- Time to Sell?

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I need your help please BP, EVERYTHING is wrong with this deal- but it started off so great--

A few years ago my cousin bought a run down house in the country that has a large pole barn with an unfinished apartment/living space in it. His plan was to get the apartment inside the pole barn finished and then live in it while renting out the house.

Things were going pretty good-- he got the house looking nice and then started work on the pole barn apartment. It was just a shell and needed everything- new electrical, some interior plumbing, fixtures, etc. he did these things "off the record" but with licensed contractors that were his buddies...And this is where things start to go sideways...

In June he got a Stop work order from the city. He ignored it with the reasoning that they couldn't actually see into his pole barn apartment (covered windows) and they didn't know if he was really working on anything- they were just guessing from a neighbors complaint. He continued to work on it and the city didn't follow up.

Then things get really bad--

In September he got the pole barn apartment ready enough to live in so now he could live in it and rent the house.. just like he planned. His friend found out about this, gave him some crazy sob story and he decided to rent the house to his friend to help him out. Since he doesn't officially have a CO to live in his apartment though, he tells the friend that they have to say they all live in the house together as roommates.

The "friend" turns out to be a horrible renter, drinking and being loud and disruptive at all hours. He leaves bottles everywhere and my cousin is worried that the neighbors are going to call the police about the disruptions. He did get rent from his friend the first month but doesn't expect that to continue for long.

My cousin doesn't think he can evict the renter because that would expose that he does not actually live in the house as roommates. He is so overwhelmed with the whole thing that he plans to just sell the house in the spring.

I hate to see his 2+ years of hard work go down the drain and I would like to be able to give him some advise but we only have a few rentals and our missteps were nothing compared to this so I don't have experience to draw from. I am also worried for him that the renter is going to trash his house.

So BP, what would you tell my cousin? Can he still evict the renter? Is there any hope for this situation? Should he just sell the house?