.- Given the fact pattern it appears that they are aiming for a Rent Escrow Action against me in court even though they have no basis.Questions- Should I respond to the repair letter?  

The reason I ask is in my market appraisers often do not look up permits to determine a unit is legal if the unit appears to be legal.  

Even with only $1000 in rent I’m still over a 1 to 1 ratio (was not taking out a lot of equity) but under a 1.25 ratio.A lot of investors have the equivalent of llpa’s at 1.0x, 1.1x, and 1.25x, meaning that your rate/pricing will likely be marginally different at each threshold.

@Brenda Garcia appear you may be responding like their intimidation tactics are working:(You do need to know the laws better than the tenants!

Make sure you are, in fact, spending less on a monthly basis than if you were buying/renting an equivalent personal property.

I just put one in my duplex last fall to make it more marketable AND to solve an issue with grading/appearances (and because I live there). 

@Sandra Youkhana  It appears, you are living through what I lived through.

Too bad as they were outstanding tenants in every way (their unit appeared owner occupied nice, rent always on time, easy to deal with). 2nd was married couple with a trans female and birth female.  

The Registered Agent will record the documents on your behalf so only their name and information appear on the documents.

While it would appear to be a bad move, the tenant in the upgraded apartment may be happier, stay longer, tolerate rent increases and be less trouble.