One other MA change on the health care side is they have lowered lead levels of children on which action from the state will be taken in MA so more people with see health department intervention earlier that has it upsides. 

You could try to reach out to the city department responsible for it to rectify it, but if the tenants have already done so and they've confirmed nothing is wrong...

To get into compliance, if it is even possible, you will need to speak to the city planning department to see if the property is eligible for rezoning, a special use permit, a guest quarters, or an ADU.

Would recommend 6 acres up to 15 acres.Stop by the Building/Zoning department. 

That said, I think the reason many building departments are so stringent with investors is the illusion that most are looking to cut corners for the sake of profit.

You may be allowed another use besides residential, however you need to confirm that with planning department where this property sits. 

The accounting side;An option is to open other accounts in the master's name and give that account a department name, A, B, C, etc.

I would recommend making a list of what you need, sectioning that into "departments", and getting at least 3 bids for any construction related project. 

In order to count rental income from the departing residence to qualify for the new FHA mortgage, the new home has to be 100+ miles away and you must have 25% in the departing home. 

I would keep reaching out  (emailing is preferred, so it's in writing) to the county permitting department until you get a clear answer, even if it is "We don't have any occupancy septic rule".