Is this something my realtor should have looked into; asked about the POS report and either found out the sellers weren't going to fix things or ask for proof they were compliant? 

If Planning does determine the existence of your ground floor unit, it will require you to legalize the unit through the existing Planning code process assuming zoning supports the third unit OR using the new ADU program making your fast track condo conversion a passing dream.With regards, to some of your latter comments and questions:1) Any un-permitted work (including corrections) is not a good idea as a quick compliant from a neighbor can bring an inspector knocking on your door with a NOV especially in the current environment where everyone is SIP.2) Legalizing existing constructed spaces can be hit and miss based on the inspector you get.

Other than that you would have to see if they are compliant with the lease.

., lower Airbnb income, longer renovation time)Consider professional property management to reduce your workloadEnsure you're compliant with all local laws and regulationsFactor in potential capital gains taxes or other tax implicationsRemember, while the potential returns look attractive, real estate investments always carry risks.

The exact amount of capital gains you can offset will depend on the cost segregation study results, so it’s crucial to discuss this with your tax advisor to ensure you’re maximizing your benefits while staying compliant.

Bonus depreciation is phasing out, but a cost segregation study can still help with tax benefits.Make sure to stay compliant with local laws and HOA rules, as regulations are strict.

Managing or leasing the property yourself would likely be considered self-dealing, which is prohibited.To stay compliant, it is best to hire an unrelated third party to handle the leasing and management duties.

(B) The accessory dwelling unit was built on or after January 1, 2020, in a local jurisdiction that, at the time the accessory dwelling unit was built, had a noncompliant accessory dwelling unit ordinance, but the ordinance is compliant at the time the request is made.(2) The owner of an accessory dwelling unit that receives a notice to correct violations or abate nuisances as described in paragraph (1) may, in the form and manner prescribed by the enforcement agency, submit an application to the enforcement agency requesting that enforcement of the violation be delayed for five years on the basis that correcting the violation is not necessary to protect health and safety.(3) The enforcement agency shall grant an application described in paragraph (2) if the enforcement determines that correcting the violation is not necessary to protect health and safety.

Not only are you making hosts that operate in a compliant way look bad everywhere, but you are also encouraging even more regulations to come across counties/states as a whole.

In the event they do not get rid of the dogs, they will owe a few grand by the time they can get the AB468 compliant ESA.