Both of you should sign this at your lawyers office to make it official. 

Should they set up a lease and make them official tenants?

Let them know you will have to do the official inspection after they vacate but this is a great opportunity for you to identify problem areas they may be charged for.Finally, the move-out date will pass and you have to determine if they are out or not.

I would delay closing until the tenant has officially left.

The sponsor claimed his CFO quit so he could not provide any financial info.They have not officially told me my investment is gone...but that is just a matter of time.

Also, if I am not officially on title how am I still able to sell the property?

As a long time local government official responsible for processing and making staff recommendations on this type of zoning variation requests, here are some recommendations that should improve your chances in achieving your desired end goal:1.

The inspector said nothing of my friends stuff everywhere and I haven't exactly officially moved out.

First off, this is my first official post outside of the "member intro" sub!

I'm actually surprise, you are ready to make an offer without having seen these contracts.If there is NO contracts and it is only a verbal agreement, ask for it to be written as an official contract.Generally, when you purchase an asset, you need to keep the contracts in place until their expiration.