If he is the one who is licensed, and he has insurance to prove it, no need to panic, maybe it is just a lapse, and so i was guilty for that also, while i was doing a fence job for a city client (city yard fencing) you bet they allowed me to continue the work for the next 5 working days, they shouldn't, but they did, under the clause they won't cut the check or tender billing until i get the papers corrected. got proof that the license got renewed (application and payment to renew license), they accepted it.

Are they all currently paid up with no lapses, or does it seem like you'll need to evict any tenants within a few months of taking ownership? 

I'll move everything to the garage and wait until the time period lapses. 

Fayetteville rental veterans: do you tend to have much lapse between tenants?

At that point, how they clear the unit is up to them.An alternative would be getting copies of the lease and seeing if the tenants of your preferred unit have let their lease lapse and are now on month-to-month.

My experience is that renters rarely get it, and those that do get it often let it lapse, and keeping up with it as a requirement of tenancy is a hassle, and you should always maintain your own insurance in case something happens as you damn sure don't want to be relying on a tenant to insure your property. 

There are several pitfalls in this area including the owner's challenging Due Process and proper notice which will negate the sale even if you're the winning bid.Additionally, you may need to leave the property empty and w/o improvements for several years awaiting the Right of Redemption period to lapse and that can kill all rehab or renting intentions.

It appears as if the seller is dealing with a lender that also has an early payment penalty clause for about another year, so we were looking into helping him out with that and possibly taking over ownership, but not recording it and paying off the loan until the penalty lapses. 

The standard clause states in the event of a total loss you will get paid your interest and the lender its (Paragraph A), The type of contracts required for someone to be considered a lender (Paragraph B).It generally goes on to state the insurance company will notify the lender if your insurance lapses, allow the lender to collect if you purposely damage the property and allow the lender to take over premium payments if you do not. 

The servicing company servicing the note would get notified, if they are listed on the mortgagee clause, and would notify you of a lapse of coverage before you spend time or money putting more expensive forced placed coverage on the property.