She was determined to close the sale by the end of the month, but her husband, who had no legal claim to the property, refused to leave.The situation was emotionally and logistically complex.

My guess is 2 months' worth is to establish reserves, and the rest is prepaids on these.

Be sure you contact a securities attorney to sort through all this and get a legal opinion. 

There have been multiple legal challenges to this position of the FTB (California tax department, or Franchise Tax Board), but I don't believe any CA resident won such a fight.

It’s your property and you can sell it FIBO, with an agent, by any other legal means, or give it to the ASPCA.

The reason should be communicated to the tenants.Since this is a case where the landlord wishes to terminate the lease early, the landlord may want to consider offering a cash incentive to the tenants.If the tenant doesn't agree, they're legally allowed to remain tenants until the remainder of the lease.

That said, it's certainly impacting my project in numerous ways and I will have legal expenses. 

I'd imagine having a roommate who also gains equity would turn into a legal nightmare when either of us decide to move. 

Im looking at a property that has two legal units and a third that is not.

May not be legal, but doesn't seem like it impacts your situation here.