I would have them sign off on the contract being terminated and them being paid in full for what is owed. 

https://www.biggerpockets.com/forums/51-tax-legal-issues-con...

In the contract, state that if usage exceeds 120% of the average, the guest will be responsible for the extra cost.

I wanted to see if there was a legal way of converting the office to a short-term rental as well and just run 4 short-term rentals instead.

This approach minimizes potential friction while still providing sufficient time for them to make arrangements.Using certified mail for official notices ensures legal compliance and provides a paper trail for documentation purposes.

The seller agent had claimed he had 17 calls from the day he had the sign out for sale and that he wants to move on with another contract if they have to obtain a U&O.

The property must be a legalized state.

I would also have every possible scenario moving forward specified in the contract.

An assignment contract is what you're looking for.

I can see the advantages of being able to get a down payment to reinvest in a small MFR and I will be able to capitalize on my lower interest for some positive cash flow.All of the disadvantages I can think of involve some upfront investment for legal advice and work, time for further education and that's about it.Any feedback will be greatly appreciated.Thanks all!