Would assume you cannot raise up to market level for existing tenants but agree you should check the ordinance/consult lawyer. 

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The seller mentioned he was going to contact them (seller is a licensed agent) but if I'm being honest, I'm not entirely sure what my role is here other than the fact that I am giving a check for a certain amount. 

Check with their broker.

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The first guy left without issue after the tenants realized they were going to lose their apartment; the second is tbd.When I get unauthorized tenants, I write a very short and simple letter stating that everyone has to be on the lease and pass a background check.

As a homeowner turned renter and retiree from another state, I had assets (savings account balance) to prove my capacity to pay the rent for a year and a good credit score to prove my character of paying my bills on time.

So they go and list it on MLS for 260 it never sells of course because its no deal.it swings back to me and sure enough.. once we dug into it a little more these guys did not realize she owed 195kk against it and it was in foreclosure.. about to be lost.. so they had it tied up  had fouled up her title by recording that document and they were going to lose out. so long story short I told them I would give them 6k and the seller 5k. and stroke a  check on the spot for 211k.. and it was done.they were lucky to get that. but they would have had no compunction ripping 100 to 150k of equity from this older lady in distress.I leveled the house built a new construction that sold for just under 750k and we made right at 200k net profit on the deal.. but I would have passed if I thought these guys were ripping this ladies equity I don't care how much I would have made I can make that on another deal and not take advantage..now granted when folks CLOSE and then resell well all bets are off and its harder to go back and see what someone paid for things.. 

Make sure you check each one very closely. 

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