My property LLCs (like many single member ones) are considered disregarded entities. 

If the owner has proof that the tenant was notified prior to their lease signing and it doesn't impact their use of the space then I'd disregard their threats. 

@John Clark also you are completely disregarding the section of the lease that calls for timely payment of utilities.

And most probably disregard them anyway. 

If you act in good faith according to the agreement you have with them, and as required by law, you'll fare much better should this go sideways and land in court.Standard disclaimers: I'm neither a lawyer nor licensed in CA, so feel free to disregard everything I've said!

In the end you will likely not be friends any more and your whole family will think you are a greedy money grabber or worse.But, if you decide to disregard this advise and do rent to friends or family, here is some additional advice to ignore:1. 

First, there's tenants of all sorts and nobody responds exactly the same given the circumstances or a landlords actions.There'll be people who disregard acts of kindness and who don't care, but there'll also be people who appreciate everything extra a landlord might do.

I get lots of automated responses from the Zillow prospects that either (a) ask questions that are clearly answered in the narrative, or (b) don't actually ask anything (i.e. "1-click inquiry")For all of its criticisms, CL still works the best for me.If you've tried other sources of marketing, please disregard my input. ;)

@Charles McCabe is on the right track.An LLC, particularly a single member LLC, is a disregarded entity, so the first issue is that you are doing business with yourself. 

If someone chimes in and says that this isn’t feasible up there then by all means disregard.