Recently, another tenant reported it to the City, and I received a code enforcement letter requiring a permit for the HVAC.

It seems they would be the only branch of law enforcement to tackle this misrepresented false renovation to steal hard working Americans money, property and dreams.

Look up enforcement #'s of such, it's all but non-existent. 

Does your lease have the tenant responsible for the actions of guests and are to enforce the provisions of the lease with the guest? 

If the unit has issues such as ingress/egress, bad electrical, is newly developed space without meeting minimum ADU setback requirements, etc then of course the jurisdiction can red tag it and enforce it.  

Has anyone come across any issues with insurance being enforceable if they transfer over a property from a personal name to LLC with a loan on it?

It's got 3 units with 3 addresses assigned by Zoning enforcement, although zoning still saying the use as a triplex is nonconforming.  

Generally speaking, a verbal agreement is impossible to prove or enforce.

If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.6.

Some things I do to avoid bad situations: screen well, only have properties in good locations where people actually want to live (I find tenants behave better when they know they have a good thing going for them and that they are easily replaceable), set proper expectations, have a rock solid lease, go over it with new tenants to make sure everything is clear and agreed upon, and enforce the lease by issuing a formal notice to pay or quit every single time rent is late by even one day (and charge the late fee), or a formal notice to cure or quit every time there is a lease violation.