Regarding your question: The court in the past have looked at these intents:  The agreement between the parties and their conduct in executing its terms; The contributions, if any, that each party makes to the venture;Control over income and capital and the right of each party to make withdrawals;Whether the parties are co-proprietors who share in net profits and have an obligation to share losses;Whether business was conducted in the joint names of the parties;Whether the parties held themselves out as joint venturers; andWhether separate books of account were maintained for the venture.In more complicated cases, the court has ruled what you are expecting, but there were some significant differences. 

As many of you know, when a 1-4 unit property is held in one's own name, better financing is/can be had.

If on the other hand a borrower was in bankruptcy and the lender went and held a foreclosure sale while the borrower had stay protection, without seeking and being issued relief to proceed to sale, that's another issue.

We had it installed on the face of a bar in a retail store for 2 years and it really held up.

@Eric Bilderback For the borrower to eligible for cash out refinance  the borrower must have held legal title to the lot for at least six month prior to closing of permanent mortgage before cash out. 

However, what good is a lease if people aren't held to the provisions?

It would also be a stronger argument if you had done this and then held the newly created properties for a year or so.  

We held off on doing this early in the project were negligence was obvious due to being scared of the delays we would face... we paid dearly for that line of thinking. 

All my contract says about the earnest deposit is the amount, who it will be held in escrow by, and that it will be credited to the buyer at the time of closing.

Most of my smaller value properties have been rehabs that I held, BRRR basically.