You could force the seller to bring it up to code before the sale is complete as one of the contingencies of buying it, let them deal with it.

Your other questions are better suited for an attorney to avoid misinformation.

I understand there are some protections that go along with it with all the law suits going around but hardly doubt they would go after an office with two agents in it.

I use Eric Kloth out of Redding and he is stuck with us for this and our future home buying needs. 

Ya playa I'm not buying what you're selling.

My first property was a duplex, and then a year or so later she bought her house, and we moved in together living in MIL suite basement and rented out the rest of the house.

Then I'd start by saving up, so you can buy your own house and rent out rooms in the house (or buy a place with a suite).Talk to your parents about what their goals are with the properties, what they like and what they don't like.

Quote from @Garry Lawrence: I need advice on a serious situation involving a property I’m about to buy.

National banks typically do not offer products that suite your needs here. 2.

Your best route might be to buy a 2 to 4 unit property that you can live in and rent out the additional apartments.