The Home has the following:First Floor and Finished Basement:(Owners Area)First Floor: 2 Bedrooms, 1 Bath, Office, Kitchen, Living Room, Dining Room, Enclosed Porch Finished Basement: Full Bathroom, Laundry Area, Living/Recreational Area, Tons of Closets/Storage, Mechanicals RoomBasement In-Law: (Tenant)Separate Entrance, 2nd Shared door with Owners finished basement, Kitchen, Bathroom, Living Area/Bedroom, Closet SpaceSecond Floor: (Tenant)Shared Side Entrance with 1st floor owner, 2 Bedrooms, 1 Bath, Eat-in Kitchen, Living RoomMy issue is this:Currently the owner rents out the 2nd Floor and also rents the In-Law suite to a "relative".

There are some houses out there that do have a mother-in-law suite in the basement.

I know some case law and having an interest seems to be the only way to be protected against Broker's and lawsuits and possibly an unscrupulous Investor, who may decide to undermine you if you had no contract to begin with.

As mentioned before, I totally understand the business side of it for you company and outside employers however it only takes one bad apple to send you into a lawsuit.  

This lends to going down the path of possibly providing the tenants with financing, installment contract, disguised sales, delayed closing transaction, equitable interest, refunds, lawsuits, loss of profits... etc.

The Liability policy would protect you against slip and fall type lawsuits from the tenant and anyone else coming into the property.

I don't know what the surface is but if the parking lot develops potholes and someone steps in it (twists their ankle, breaks their leg, etc.) good luck dealing with lawsuit.  

Pair that with his in-depth knowledge of the law and his history of taking people to court and I'm worried that I'll be looking at the business end of a lawsuit if I try to get him out.

Note that these kinds of lawsuits---combined with other consumer protection statutes---can sometimes lead to a fairly big judgment against the landlord. 

It was a 3/2 with a mother in law suit.