While the agents might get dragged into this as material players, and they are subject to over-sight and discipline from the regulatory environment that governs their license, any issue you or the seller have with your respective agents would need to be addressed as a separate case.You stated your contract was one that was a) entered into by both parties (do you have a written contract signed by you and the seller?

There are lots of restrictions like setbacks, height, lot coverage, parking requirements, access, ingress, egress, etc.

Furthermore the city will not allow the separation as it would not meet their size and setback requirements.

@Wes Stange not only are the prices in Seattle proper intimidating, but so is the regulatory environment.

At a bare minimum, I would document everything and file a complaint with the state regulatory board.

.#1 has more people, more kids and more jobs to just qualify...... one set back and they fall apart and you end up evicting them....way too unstable......

bill_id=201920200AB1482The section regarding rent control is under section 1947.12 paragraph (d): (the exceptions)(d) This section shall not apply to the following residential real properties:(1) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.(2) Dormitories constructed and maintained in connection with any higher education institution within the state for use and occupancy by students in attendance at the institution.(3) Housing subject to rent or price control through a public entity’s valid exercise of its police power consistent with Chapter 2.7 (commencing with Section 1954.50) that restricts annual increases in the rental rate to an amount less than that provided in subdivision (a).(4) Housing that has been issued a certificate of occupancy within the previous 15 years.(5) Residential real property that is alienable separate from the title to any other dwelling unit, provided that both of the following apply:(A) The owner is not any of the following:(i) A real estate investment trust, as defined in Section 856 of the Internal Revenue Code.

Building height restrictions, setback requirements, zoning regulations, parking requirements, impact studies for everything, crazy permit fees, long approval processes, etc.

You might say "lesson learned" for the owner of that property, but if it happened on my SFH in California it would be a giant set-back if not the end. 

But the house is set back behind two houses.