You can also transfer the grandfathering to the new owner.

There are pros/cons for doing so.You transferred items that may be considered passive to active income.

The snow removal company has approached me about payment for services subsequent to the sale and transfer. 

Its a transfer. 

@John LeeClosing costs(title fees, transfer taxes, lender fees) are not currently deductible but added to the basis of the property.Since you have 2 members in the LLC - you will be required to file a partnership return.Regarding your question of paying mortgage/property taxes by the LLC that are issued in your name.I think the correct way is for you to personally pay for the property taxes and list the amount you pay on schedule E as "un-reimbursed partnership expenses(UPE)". 

The owners are transferring the previous security deposit over to the new tenants without even going over damages.

Just transferring the ownership of the home to an LLC won't change who is responsible for the mortgage. 

This would trigger transfer taxes and he would more than likely pro-rate the property taxes.

The biggest disadvantage of S-corp is when you want to transfer an asset in or out of the S-crop. 

Child State Lien and Transferred tax lien are not wiped out at Trustee Sale.