1) Yiu REALLY need to know what CA will  allow you to do, I don’t know, but the state may say too bad landlord, you lose. 2) Assuming your attorney (Or you if you’re able to decode the laws that relate to your situation and are willing to go to court in front of a judge against a “sick” kid.) think you have the right to collect the rent I’d give them two options. 

Sounds like a bad situation.

Best part is NJ is not what its made out to be in terms of landlord friendly, the state gets portrayed as the entire state being bad when really most wacky laws are in the major cities and they apply to 5 units or more.  2-4 unit multi families fly below radar per say. 

Its really not that bad.

I do not think they regulate this strictly on other industries like food service, or even medical.Sounds like the mayor or city planner or someone "important" had a bad stay at a STR somewhere.

I have seen too many partnerships go bad (almost all, just a matter when), that's why in 15 years I have never partnered.

That would almost always be from the same lender who has a 1st AND 2nd on the property and they are just fed up with the owner and are taking the opportunity to get out of a bad situation entirely.Sorry, it's complex enough that it isn't a 15 minute class.

But I have 0 empathy to pay for someone's CHOICE of not having there stuff insured. 

I'll be the bad guy for you

It was so bad we almost lost our property because the sellers wanted to back out.