Nosy Neighbor & Renting illegal ADU/basement unit in 2-fam

[Alejandro Tirso]

**Urgent help/advice**

I invest in North NJ, which is densely populated.  It's very common to have 2-family homes with a separate entrance for the basement.  Some specific cities require a CO, other do not, with the main sticking point of tapping the gas line & removing a stove.

Depending on the city, it is common to rent these basement units at a discounted price to individuals.  My friend just rehabbed and rented his basement unit, and a nosy neighbor said "you're not allowed to live here and it's going to be trouble for you and your family" to his tenant as he was moving in.

How does one handle this neighbor?  Technically there is an interior hallway in the back of the house connecting the first floor unit and basement unit.  The basement also has a ground level entrance from the street. Does he approach the neighbor?  Does anyone have any experience in this scenario??