Second, a little more back story, my father in law has worked with this contractor a few times over the years, he assures me all work will be to code and the work will be done right.

I found it a good overview with a few errors about local laws in my area.

Look for the law to change.

Add that to your documentation.If illegal drugs are involved, it might be worth your time to contact your local law enforcement.

Because the laws are very complex in this area.Here's a simplified example. 

Enforcement of HOA rules falls under civil law.

It’s a single family home with a full apartment-like in-laws suite upstairs that can’t be rented as a separate apartment (no separate utilities, permits, etc.) 

Not sure what the NJ eviction laws are but you might want to check on that too.Also in my experience less than half of the properties listed on the auction.com website ever come to auction. 

Inman recently published a Warning about how the Upcoming GDPR Law may Force Every U.S.

We purchased our primary residence about a year ago and have been building out a basement apartment we will be renting out to my mother in law.