House hacking is like the cheat code for personal finance IMO. 

We just want to be certain we are following tax code and IRS law with our first move in this arena

I spoke to code enforcer as i was initially going to make the unfinshed room a 3rd bedroom to one of the uints but wasnt able to, but i could make it a storage space.

I am not a tax professional, but I've read the IRC sections of the code and that's the way I interpret it.

City Code Enforcement: Properties that are consistently getting warnings and citations for failure to care for their property could easily be rentals where the landlord is over his head and would take an out, if presented, but can't afford to fix up the place to sell it.

If it was a property I was managing, I'd get the owner and tenant to mutually agree to terminate the lease early and work with the tenant on flexible dates for move-out.You should speak with your local municipality/county as the rental property likely needs to be repaired up to their code, and they can assist you with getting the tenants to vacate if it's a true safety concern, though you may be on the hook for at least temporary accommodations for them if they are asked to leave before the lease is up.

Check code on historical homes.

I'm not an attorney, but I'd give your tenant the whole section of code pertaining to residential security deposits:From Utah code:  https://le.utah.gov/xcode/Title57/Chapter17/57-17.htmlEffective 5/8/201857-17-3.

So anything you see like that around town is also a non-conforming, un-permitted feature.I've seen projects that permitted and built everything to code, then apparently added access after Certificate of Occupancy is issued (exterior stairs, attic access, etc).  

Unresolved or ongoing code enforcement issues?