How do you find out their parents occupations (i.e you mentioned some parents were Lawyers) if the parents are not filling out applications?

Highly recommend getting in touch with a good landlord/tenant lawyer that specializes specifically in CA. 

Based off our lease agreement, my lawyer says that it is the responsibility of each tenant to repair their own space.

Did you get a realtor and/or lawyer involved? 

Definitely check in with your lawyer to make sure everything’s above board, but these steps should help you handle the situation while keeping the tenant relationship intact.Hope this helps!

It has always been dictated by my bank or in 2 cases by my lawyer when other people were involved. 

I need some guidance with this one before I just reach out to a lawyer.

I'm not a lawyer, and you can speak to an attorney about this, but in my experience people are typically thinking that putting their property in an LLC "protects" them. 

We are getting push back from the seller about creating a purchase agreement with our lawyer that they would then need to review with a lawyer.

If the landlord was aware of his past, yet rented to him anyway - any lawyer worth their salt would make a nexus between those two pieces of information and create a liability claim.In addition to the extreme negative press you would get, it also takes time, money and energy to defend a lawsuit you will eventually win.