And the other listing agent told the customer my intention and they pulled it off the market.

Even with the best of intentions CFDs (especially when they represent a high amount of leverage) can turn into a nightmare quickly.I think what I'm reading here is that this is your former primary residence and you moved out 3 years ago this coming August. 

Purchased it knowing it would be a project with the intention of selling after 2 years to avoid capital gains. 

For my friend the rental experience ended poorly - tenants trashed the property, although not intentionally and it had to go through the LTB to get them out for being late on rent. they had also bought it in anticipation of the bowmanville go train.

The Seller can notify the tenants of the pending sale and your intent to increase the rent.

, but I want to be sure we are both protected from the other's potential partnership liabilities, whether intentional or not. 

I've seen a lot of similar things.Obviously the intent is this allows greater access for people with disabilities, for example a wheel chair. 

All initial intentions were to build and hold for long term investment.

It could be a short term investment with the intent of increasing NOI and refinancing to pay the investors back, or it could be a long term hold.

If they buy the property with the intent to fix it up and re-sell for profit the IRS views it exactly like inventory for any business.