they sell short-term compliance data to cities to find/fine unlicensed STR's.  

If so, for a medium term rental do you do any extra contracts to ensure compliance with CO rental statutes/appropriate security deposits, or are you satisfied with the terms/insurance/etc. through AirBnB?

When explaining to them this strategy they didn't understand and actually got the HR lady involved and she assured them that taxes were being taken out of my paycheck every two weeks.

I am not going to preach or rant about the successes and the positives in the game even though I really want to but if you go through my profile and read all the times that I have motivated and ranted about why this business is great, I assure you , you won't be disappointed, because I say some great things about not only my successes as a 20 year old but the people that I work with and meet with me and talk to me. 

Typically every City/County code explicitly prohibits their use as dwellings...Here is a mention of this prohibition within the County mentioned in their ADU guidelines, but I can assure you it applies pretty much everywhere.That said City of SD did recently allow them to be used for ADU dwellings.

The new laws went into affect on 1/1/17 and he said that they currently have 54% compliance rate with the law, have forced roughly 18-24% to either stop renting or change the way they rent (no contract less than 30 days) and are still actively and aggressively pursuing the balance.Step 1 is a warning letter, Step 2 is a $50 fine, which they will waive if you come into compliance within 30 days.  

This protects all parties because changes can be the result of many variables (I.e. architectural design errors, unforeseen code compliance discrepancies, etc.) and can potentially result in neither the GC nor the owner footing the bill, if handled correctly. 

I worked with the city code compliance officer to stop the demolition.

Your sister should check with her local government to make sure she is in compliance with all relevant laws, such as zoning and occupancy regulations.Create a rental agreement: Your sister should create a written rental agreement that outlines the terms of the rental, including the rental rate, security deposit, and any house rules.

Then reinspect for compliance. 15 days should be more than enough time.