@Andraise Scott - as @Jon Holdman mentioned, a judge will take the side of the "victim" and declare the arrangement to be a loan that was disguised to take advantage of the situation. 

My guess is that they filed paperwork with the city and pay more taxes to declare the small room as a bedroom to add to resale value, but it's not really a bedroom since it doesn't have a wall separating it.

You probably need to consult an attorney on this since he has now declared bankruptcy to see what your legal rights are to the property. 

@Kevin Parsley,How long was it from the time the tenant departed to the time the PM declared the unit abandoned? 

In Texas , property taxes are not capped at the year of purchase.If you area an investor, the property tax rate and valuation can go up or haha down every year an unlimited amount without a capIf you live in the property and declare the property your homestead, the valuation increase is capped at 10% per year and once sold will adjust to market value.

IMO, you have a pre-existing condition AND a declaration from the current owner.Existing tenants have been there some period of time already.My plan would be to test and correct if necessary ONLY on a move-out.

Real estate investing beginning in 2004 eventually caused me to declare bankruptcy.  

You can even declare the LLC to be non-existent in the IRS's eyes so you don't have to file a tax return for it (which means less you have to pay an accountant).

Basic Documentation requirements;*Our (2) page property and Credit application*Bona-fide Lease agreement*Hazard Declaration coverage*(60) days Bank statements to cover 3 mo.

You’ll probably have about $15k in capital gains tax if you declared the $282k value when you started renting, more if you declared a lower value at the time you started renting it out.