Unless stated in the contract somewhere (which based on your post I'm assuming it isn't) the seller has no requirement to extend and, since you are the party that is unable to perform under the current contract there is probably nothing you can really sue him for (this is not legal advice, just an opinion).

What legal action can I take if possible?

Plus (I'm assuming) an HOA on the town home.Perhaps, if the larger home you all purchased had a legal separate residence...like a basement or an in-law suite...that would allow you all the tax advantage?

@Michael Rock, the bedroom has to be legal and included in the assessment from your town.

As far as an actual legal issue, I’m not an attorney, but if I purchase a property (with the end buyer’s funds if the law allows, or with transactional funding, hard money, money I borrowed from friends or family, or my own money) I am pretty sure I am able to sell it to whomever and at the best and highest price I can without getting in trouble with the law.I am NOT talking about brokering a deal or selling a contract here.

Any insight into these kinds of legal documents would be really appreciated!

Needing to review legalities for a private lender and draw up documents that outline our potential deal and partnership.Has anyone had great experience with a lawyer they would work with for a lifetime?

Do the minimal required legally until their lease expires, then get rid of them.

The eviction lawsuit taken to a default judgment should cost you around $750 in total legal fees and court costs. 

That is MY intellectual property, he has/had no legal right to keep it up when I asked for it to be taken down.