If all parties involved are informed, including the lender, this is 100% legal. 

The challenge is adjusting policies so they are legally compliant while still protecting your investment.

This is where following the advice of competent legal counsel will keep you out of jail.  

What legal rights do I have?  

You don't need anything fancy for your first rental property.Expanded answer:Google "legal structures for direct ownership real estate" and do some reading to learn what each structure offers and the limitations.

Nothing fires up a tenant like legal notices, especially hirer income people who have never got one in their lives.

However I agree with the Motion for summary judgment surrounding the QUIET TITLE action affirmed its likely NOT a collectable debt and YES we are getting a more firm legal opinion on that... 

There is a legal difference. if you mess that up, that will get you sued.Third, in the last couple of years, new restrictions have been added in certain states.

You can absolutely finish the downstairs — electrical, insulation, framing, replacing the garage door — as long as it’s still one legal ADU with one kitchen and one address.

Those are legal issues, not tax issues, and renaming the relationship does not protect you.If it actually worked the way the guru claims, I'm sure every landlord in strict markets would already be doing it.