We took legal action and got a legal judgement against him. 

And/or are you willing to take the risk of being sued by the seller for not performing on a legal contract (and losing your earnest money)?

(There’s no way to transfer title that can legally prohibit enforcement of due on sale, except transfer to the owners REVOCABLE trust or transfer to children upon death).  

Has anyone had any luck obtaining legal counsel and fighting this?  

Indeed, the FAIR ordinance is anything but fair to non-corporate landlords, seemingly punished for investing in rental houses to generate income as an alternative to stocks and bonds.A handful of opportunists likely could learn to exploit these new rules, preying on otherwise law-abiding landlords to obtain legalized shake-down payments.

You assume the owner occupant term is not enforceable...what are the legal grounds for that?

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

After looking into it more, I'm concerned about potential tax implications and legal issues, such as piercing the corporate veil.

In case you have not noticed, our national debt is already out of control, and there're legal limits on additional borrowing.The government has a third option: print more money.

I am exploring "office hacking" but i don't know if there are any legal or zoning issues with something like that.