It will be interesting to see how this plays out, because this last July, Seattle also passed new land use legislation that allows up to 2 additional units on a single family home property (one attached accessory dwelling unit and one detached ADU). 

Tell the tenant if they feel unsafe to call law enforcement and you have fulfilled your obligation. 

Currently IL has passed legislation to outlaw it, but it's not to North Carolina yet. 

If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.6.

There are little-isms with each town that they enforce in the inspection so your first year repair costs may be a bit higher but then they will go down as you understand the township better. 

Does this vary per lending institution or is there actual legislation involved? 

I'm in law enforcement so we get called to these issues all the time.

My gut tells me that the courts are more likely to enforce a seller to sell than they are a buyer to buy.

I have seen a few condos that do not have "rental restrictions" but if you read their declarations it says no restrictions on leases that are more than 30 days, meaning they have a restriction and a right to enforce and prevent short term rentals(AirBnB).

I spoke with someone in zoning at City Hall, and she said there’s been some debate about whether or not they will be enforcing a fee, so the saga continues.