Expenses are all defined in your PM agreement.

Maintain proper records - Contracts, Settlement Statements, Agreements, Promissory Notes etc.Additionally, youcan track income and expenses consistently, using software or spreadsheets.As you scale, ifbookkeeping isn't fun for you, consider hiring a bookkeeper for a couplehundred bucks per month.

I agree that someone who has no interest in the property, or a legal right to sell it for the owner (Broker Agreement/Commission Agreement), cannot market it for sale without being a VA Broker.

His insurance company is asking for a lease that shows he had use of this area as part of the lease agreement.

He was able to get 2/3 of it only because he made him sign on the agreement, he would get a refund if it doesn't work for him. 

The contract / purchase agreement should tell you, and it is probably you who should be / will be filling that out and deciding.  

Are there standard co hosting agreements?

Obviously you should have an agreement to the exact terms of the partnership between the two LLCs.

If an entity holds title and you and the other partner own % interests in the entity than you can specify special allocations that are different from ownership % in the partnership agreement/or operating agreement (assuming the entity is taxed as a partnership, and not electing to be taxed as a corporation/s-corp).

How do you all handle annual increases to adjust for taxes and potential insurance hikes and would you have them sign a new MTM agreement or add an addendum?