Right now, I concern myself with the quality asset.

I do wonder just how many people are going to leave California permanently from all this.

STR is another concern, many towns have laws against it but most towns do not enforce these laws, just make sure you are aware of them becuase they can be enforced. 

Now, this tenant is saying that they don't remember any agreement and thought they paid month to month and could leave whenever.

I also advertise before someone moves out to get a new tenant before the current one leaves. 100% occupancy on a LTR is very common for me.No idea on a MTR.

Ethical ConsiderationsYour concern about ethics is valid and shows you’re approaching this with integrity.

Also keep in mind that if the concern is lawsuits, they can still name you individually in a suit and it is just another battle.

True although the fires this year just adds to the reasons to leave California (excessive taxation and regulation, overbearing political correctness, downtowns littered with feces, etc.).

I don't care if 99 of 100 homes in the area have K&T, I would NOT buy it and leave it with K&T anywhere.

My concern is whether I’d then be locked into only larger deals in the future.