Additionally without permits you will hit a wall if you try to sell some day.Do not leave it to a lazy contractor, apply for the permits as the home owner.Any contractor that advises not to apply for proper permits is unscrupulous and verging on criminal in nature.

No offence intended.

Despite the rental history, I know my friend wouldn't be one that buy and hold investors would jump through hoops to rent to: he's tattooed up, has a criminal record,  and no proof of income (likely no evictions though!

It is probably cheaper than joining the apartment association and they would have the means to qualify a new tenant (credit, criminal, rental history, income) and ensure that the tenants are signing a lease that follows the laws in CA. 

We should never allow criminals to get off scott free.

Credit check revealed excellent credit scores, but also an incredibly high debt-income ratio; otherwise, no delinquencies or criminal background.

The criminals get inside computer systems and send real emails with real info but wrong instructions.

you will not be able to get any criminal background on a minor so a background check is pointless.

Just to cover yourself,  find other non-discriminatory means to decline them like credit score, criminal background and eviction history.

I would also include a statement that any application not fully completed or containing any false information will be rejected.If you are paying for any credit or criminal checks charge a fee that will cover all your costs.