If the bank will call their note if you commit to the transfer you can also check out this article as one strategy that has been used to work around the issue.This is not legal advice, just my opinion as a real estate investor.

.: Some of you have reached out to me to see if we can connect on zoom or other means to pursue legal options.

Hey Santosh,As of right now you're extremely exposed regarding insurance and I'm going to assume legally as well.If the home isn't registered as a legal multi-family with the town that's something you'll have to correct ASAP and make sure the home is up to code.Insurance wise as soon as they find out what you're doing they'll cancel you as the risk has changed from a single family owner occupied home to a multi family owner occupied home.

I recommend legal advice from an attorney.

Legal Implications & Ramifications : As an example; the iconic PCH homes in Malibu and many in the upper foothills might not permitted to build back, certainly not to the same extent or materials.

This is assuming the way you notified the tenants of the new rent was considered legal notice in your market. 

-Also, we absolutely pitched in to help with legal fees, $50k like you mentioned.

One question that you may not want to post here for legal reasons, is how much are you paying your PMC?

Whatever is closest to "Legal". 

@Kash Tacke legally, you would need architect drawings to get approval from Detroit Zoning Board.