This should be a very common policy down there and shouldn't raise your premiums much, if at all.If he is sharing the profits with you it could be a great way to boost revenue, you just need to be aware of your increased liability. 

A 4-plex (strictly for investment) really caught my attention and according to rentometer, I can increase the rents by $275,  per per unit.

@Andrew Johnson funny you ask.

Alternately you could send them all a notice explaining the situation and indicating that if there is another fine that you are simply increasing all rents to cover the potential costs. 

but your taxes and HOA will increase as well. in a downturn you go negative. 

Send in a ton of paper work FEIN, rent rolls for SFS, 3 years of tax returns, 24 lease agreements, contract, p&l on complex, I gave them a 5 year plan of expected rent increase vs expenses.Scheduled walk thru- Due diligence time.

Now we need to give her rent increase notice, can we increase her rent based on $650?

Thank you @Karyn Seaberg it's funny, I would like to be close as possible to the water but not in a flood zone or property that requires flood insurance.  

Heard a funny story once where some first-time buyer was at the tail end of a several month FHA purchase and had a surprise divorce... supposedly the realtor ended up "purchasing" his swing-set for $3,500 to get him over the bar for required funds, and had to supply the bank with a notarized letter of purchase so they wouldn't write the deposit off as an un-seasoned gift. 

But the best and most invaluable part above and beyond your increased ROI is the hands on experience.