National companies often have broad policies that may not actually comply with local laws.  

If they don't comply with the inspection, it's grounds for terminating the lease.  

Your friends could just leave the tenants the way there are as a property already 2/3 rented might appear more attractive to the next buyer.But to accomplish what you want, serving notice to the tenant violating the occupancy limit and filing for eviction if they do not comply sounds like a good start.  

Failure to comply may result up to $2500 per day in fines/penalties.You file a compliant, city comes out and gives them a ticket.

Depreciation begins when you place the property in service, either by occupying it yourself, or renting it out.You may be able to take advantage of a certain amount of De Minimis Safe Harbor write offs if they comply with the guidelines.

If they are just messy and unorganized, you can insist that the property be kept to a certain standard and if they don't want to move they must comply or you evict them.

Since section 8 required tenant to move out, in order to keep her benefits she will have to comply.

Thank you guys.I knew from the beginning I will have to comply even if I disagree with these judgments.

NOTICE IS HERBY GIVEN that because of the above dwelling’s condition and chosen remedy, substantially endangers the health and safety of the tenants and your failure to comply with your implied warranty of habitability by refusing to repair defects on the premises, in a proper and professional manger, as previously demanded of you, the undersigned tenant has elected to vacate the premises without penalty in accordance with California law.

Make sure you send them a Late Notice Letter to comply or evit.