If this is an accepted practice in North Carolina then something is definitely off.It seems like an awfully underhanded way to finance a potential vacancy loss using the outgoing tenant.

If there is no solution other than "you take the risk", it seems this would be a death-toll to selling houses at auctions absent a huge bucket of cash to cover losses if they happen.  

So if the whole building is 6,000 sq ft, across all 3 floors, and the tenant is leasing 1,000, you can recover 1/6th of the tax and insurance bill from that tenant.  

Absorption rates of competitive office space may not immediately reflect quarterly total job gains or losses, but it is prudent to consider longer-term economic and demographic performance as influential upon current occupancy levels.

And, if the money is borrowed and you lie on your loan application about that (they will explicitly ask and you will have to explicitly lie if you want the loan) then you're committing loan fraud.If you have to turn right around and sell this property for some reason, I,as the lender of the 20% down, will suffer a 50% loss. 

Hopefully you can recover your funds. 

We called lawyers but they said the company was so big that they were highly invested in top lawyers that would drag it out for so long the recovery would be a loss.  

Best factor in the cost to build the property as a total loss at year 20.

Should I consider refinancing to help decrease my monthly payment (my current rate is 6.41%), should I cut my losses and sell the property (which I’m hesitant to do bc I don’t expect to househack again), or is there any other route I can take?

If the loss is manageable, you might consider taking the loss and moving on.