Raise the rent 30% and market it as an old Cheech and Chong movie set that is fetching a premium.Lemons...Lemonade!

Might as well make lemonade out of your lemons !

Trying to turn lemons to lemonade I met with squatter couple signing lease stating they would pay rent the following week.  

I concur with much of the advice (like "run") but it is more complex.Here is what I would do for a win/win and try and make lemons out of lemonade (if you are interested in living there).Explore buying the place from your in-laws if you want to live there.

But ice cold lemonade and oatmeal raisin or chocolate chip cookies will be fine.

Maybe use her security services until this gets squared...lemons into lemonade style. 

We have had so MANY lemonades turns into lemon aid that our entire business plan has evolved in the last 3 years.

In California there is no legal requirement to disclose but the trade association may require it as part of their ethics if your a member.As a side note many many moons ago there was a legal requirement in California but it was removed from the books, go figure.But while it was on the books I created a disclosure form and on the form I listed 12 reasons why dealing with a licensee was preferable and made lemonade.

With the current market status, it's a good time to make lemonade with your lemons.

Like the old adage says, "When life gives you lemons...Make lemonade" and that is what I'm trying to do here.Here is a description of the property and I'm attaching a pictures.