Now with all that being said certain Landlords often will will use transactions like this to avoid home inspections or City Code violations. Say for example there is a certain violation. WHen contacted the seller, who is still in title to the home will reply that the home is being purchased and to contact the buyer (tenant) of the home. Regarding future inspections similarly the seller (landlord) will simply say that the property is not being rented but has rather been sold. Hopefully I have written this in a manner all can understand and recognize how certain transactions are created like this.
I can not say if that is what happened in this particular situation but it night have meaning that the City may have a different "take" on the events described in the original post. It is too bad we don't hear the City's side on this but it may in fact have a valid point. I guess it will be for the courts to untangle and decide. Things are so complicated these days but to be fair to the City its side of the story must be heard too.
(One might read a summery of chapter 4 of Sinclair's "The Jungle" written in 1906 for a better look at how these transactions work