Above-board and legal or not at all

My PM has advised me that they have a different client who has successfully fought the appraisal, but it took about 3 years, and probably cost a fortune in legal fees. 

I'm not a lawyer and this isn't legal advice - but my gut says that no release will be release-y enough if he slips and cracks his skull open.

If that's the case he'd likely need to take legal action to force her to sell.

Maybe some legal types can chime in.

Second, what do should I do before approaching the homeowner to ensure I can legally acquire the property. 

We are looking for a quick legal document to split ownership of the house based on money we put in and time that we are taking to fix it up.

To me, there is both a legal way to handle it and also a "professional courtesy" way to do so.. 

My question is what the legal requirements are to rent this property to a 4 bedroom voucher tenant.

The details:Location: Denver, Colorado located in very hot real estate market in an excellent location within 2 miles to downtown.Land cost: $475,000 currently with small 900sqft home on property Mortgage/holding cost: mortgage is $2800; I will be renting home on property for $1750/month (so I will be paying $1000/month out of pocket holding cost) while we go through the permitting processPermitting process: estimated to run 6-8 months in Denver before build can beginLooking to build five, 3-story townhomes on the lot, 1550 sqft each (about 500 sqft per floor), with detached covered garage in rear of lot for four of the units.