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This is the part I am unsure of. Is there anything that says I cannot have more than one kitchen? Who's to say I'm NOT living there myself and have both my in laws living with me. Is there anything illegal about that? Can anyone confirm?

Sounds more like they just did it without approval. Keep in mind they are selling it, so unless there is something illegal about having multiple kitchens, its technically fine as long as it was one family living there and they can and will deny any wrong doing. But as they are selling it, they...