This makes me think all the mistakes I have been doing......not enforcing a strict contract etc....1) Does he have a case to put a lien without neither of us signing a contract to begin with ?

Greg:    First, do not get discouraged by anyone, someone else is doing it so you can, not going to be easy.If not done already I suggest to look into this:Enforce that PM uses a great website for rental screening, ones with a background check and choose the best tenants possible.Review you leases to close any pitfalls and enforce the lease to the T.Keep the units in good shape and keep extra cash reserves ( fixing + trip expenses )Tiger than normal lookup on the PM ( have second PM line up ), vacancies, unit showing costs, repairs, fees, etc,  require a once a week normal operations report and a once a month full operations report.Family, friend on virtual assistant that regularly drive by the property and reports to you, or if cash flow allows and deem beneficial you can install security cameras and remote view activity on the property, nowadays there are lots of options.Check if feasible to get a home warranty plan for the units so some pain issues are self-managed by the tenant via a phone call to the warranting companyIn which city/state is the property? 

Don't attack them for enforcing the rules.If you don't like the answer you've received from them, feel free to contact me.

Most transactional inspectors, including HUD inspectors only have a certain area of expertise-- they are not building inspectors in the same way or Code Enforcement Officers.

If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff. 6.

-there is an investor cap by the builder, and I fully expect the HOA to find ways to enforce this.

If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff. 6.

Since you believe local law enforcement is watching the house, you should contact them and discuss the matter with them.

Legislation is working it way through the system to prevent landlords from outright refusing to accept Section 8. 

Who will enforce the collection of rent?