However while discussing this with someone from the registration department they mentioned I would also have to obtain a "use and occupancy" permit because my house has 2 dwelling units, and their records indicate only one.

and is there a permit?

The next step is to determine what kind of structure you can get permitted as an ADU.

Today I received a codes violation stating the lower units kitchen was not permitted. 

If you decide to move forward eyes wide open, then don't skip the permits. 

Newcomer here to real estate investing with an interest in long term SFRs and MFRs and short term rentals using the house hacking, BRRRR or traditional mortgage method.

I'm trying to read up on pulling permits and recently came across this line:"Individuals acting as their own contractor must be the landowner, permit applicant and the person signing the application.

All require a permit/license.I would definitely point you in Arvada's direction, as they've just put updated regulation into place allowing up to three owned properties to be run as short term rentals. 

There are lots of great contractors out there - in Oxnard, you will be required to provide a City of Oxnard report, which shows all the open permits and closed permits for potential buyers.  

A lease also is not conveying the rights of ownership required to contract with others or pull  permits required.Leases can be terminated, bankruptcy, foreclosure, estate matters, law suits, or if an owner must move back into a property as their principal residence, can have a lease terminated.Review the concept of the "Bundle of Sticks" ownership rights and what a lease conveys, it is only the right of possession, not all rights.An option can also be broken, consideration may not be sufficient, it may be drafted improperly or illegally.