I am looking at markets like Indiana and Cleveland but want to make sure that the turnkey companies I would deal with in these markets have a solid reputation of backing up their financials with the results they claim. 

Also, you risk losing your reputation in the community as a solid investor. 

Another unintended consequence of policy makers that don't understand business and want to play with other peoples assets.

This is classic 'reputation management' AKA damage control. 

If it does then she can move into that former rental without a tax consequence. 

It may not be a bad idea to decline that offer and pick a reputable local title agency, and get the title insurance through them -- instead of what the bank is offering.

His tax consequence will be determined by how the deal is structured.

Are there any legal consequences created by my not notifying him in writing of the increase?

Confirm that the provider has a pristine reputation (e.g.

@Josh VaronEntitled tenants being told by the government that there is no consequences if they stop paying rent.