I know I cannot get him out, sheriff has to do it, but he has no legal rights, and I don’t want to pay his utilities.

@Adrian Vega A DBA will not help you for tax purposes, for legal purposes, or for liability protection.

@Robert LindsleyThere are many properties that are legal non-conforming.  

It's also important to keep in mind that every additional rental property you own is another potential source for legal trouble, so if you grow to a certain size(and Terrell might be approaching that size), it's almost inevitable that some tenant will get a valid reason(such as falling through a porch you didn't know was rotten) to sue you over a 10 year period.

@Jay Hinrichs @Steve Vaughan Looks like there's a lot of reasonable and good thinking here, but I think it's easy to oversimplify protecting yourself legally, especially if you start small and grow.

If an occupant is not following the rules but the tenant is, are their legal actions I can take to evict an occupant that isn't on the lease?

Are there any legalities, rules, or procedures for renting out unofficial units, such as an attic unit?

Is there a risk of any legal issues because of the lack of lease or lack of rental certification? 

Is it even legal to own a SFR but rent both living spaces out to different tenants as a SFR zoned property?

The one caveat about the STR market is that municipalities around the world are beginning to regulate the market so what is legal today might not be tomorrow.