The best way to summarize seller financing is:Seller financing = Bank financing - all the hoops and regulations of the mortgage industry 

Quote from @Nathan Gesner: I've worked with many insurance companies over the years and their definitions match law and zoning.Are the terms “short term rental” and “long term rental” used in government regulations and insurance policies?

My understanding is that a multi-unit property with an ADU is non-conforming, which means when it comes time to refinance or sell the property, you might run into some issues with appraisal, with current finance regulations.

You want to deal with an entity or body that can prosecute -- attorney general office, some governmental agency, whoever regulates their activities etc. 

Typically, if a guest lawfully stays on the premises for more than 30 consecutive days, they acquire legal tenant rights (depending on the regulations of your state).

How would a TENANT violate housing regulations? 

I am getting electrical, plumbing, HVAC, Pool, and general work done on my property.

Next look up the county's law and regulations.

This must be done by a state licensed and insured plumbing company.

Why should an HML deal with the headache of financing a primary residence with all the regulations that come by law?