Your local housing authority will use HUD guidelines on the condition of the property.

Other concerns that immediatley stand out: no mention of who has authority, no voting rights etc, no reps or warranties & no language concerning winding up the partnership before the 10 year term ends to name a few.

Penalties:Misdemeanor of the first degree: This can result in a maximum imprisonment of one year and a fine of up to $1,000.Civil penalties: You may also face additional civil penalties depending on the specific circumstances.Permitting issues: Local permitting authorities might withhold final approval, revoke the permit, or pursue other actions against you, maybe not give you the CO. 

The city said there are more than 2,000 authorized short-term rentals in the city.

I heard state senator Robert Wienkowski (author of many of the state ADU laws but I am not sure he authored SB13) discuss the intent of allowing unpermitted units (he used the word bootlegged units) being to not remove safe units from the housing supply.Seeing state law currently explicitly allows safe unpermitted units, a judge should not be able to rule otherwise.  

I don't want to cause any family feuding that may lead to the use of authorities; I understand that may be necessary here.Thanks for reading! 

As unpleasant as it may sound, I would suggest calling the Tax authority in KY and tell them what your doing and what you need to do.  

Anything you collect make sure you keep secure and have the tenant authorize you collecting and using this information to pull their information along with an authorization for you to be able to collect information from their references, such as past rental and employment. 

I have two different tenants, in the same building with identical units, whose section 8 vouchers are administered by two different housing authorities.  

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