I don't think the owners are saints... but they get way more sympathy than that rotten tenant. We don't know what they thought the end game would be. It sounds like to me that they were willing to keep the tenant but then started to see she was a nightmare. I have no doubt they knew the unit was illegal. But once it got to the point that they were required to take action to do something to fix the situation... they were promptly met with incompatible laws that would not allow them to do what they were ordered to do. Also... $500 a month is not really "bank" in the context of this $1.4M house that was purchased by two families (that lived in it for 10 years). And they gave her over 2 years worth of rent back in a relocation settlement.