City is getting their taxes and the regulation has been under discussion in the past 4 years.

@Brandon Hicks I'm not familiar with the laws and regulations and such, but from what I've heard for others that is the loophole around being registered.

Which government agency(or multiple agencies) is ultimately responsible for permits?

In the case that I was talking about, it is part of a community that the city government and neighbors were already a pain in the @$$.  

There is virtually no lender that will approve this under any circumstances, and this has to do with the changes made by our federal government.

Do you think this is asking for some government intervention. 

What strategies or regulations are there for me to be able to help the seller break away from the previous agreement and make our agreement to legally valid?

The fall started when the city passed its anti STR regulations. 

For my area, that's very steep (most places are around $600).I finally have a very promising tenant coming to visit (retired government worker here to help with a trust) and to check it out.However, they want a 6 month lease.A definite pro I see is that their lease would expire in June - during peak listing and selling season.

@Gregory Schwartz I would be afraid that Hardie might break on the radius portion Also Hardie creates silica dust which OSHA now has regulations on how to deal with