Stupid laws and rules are meant to be broken, and in general, rules should only be enforced if someone is actually being harmed by them being broken.
Ratting on the owner of the house next door just to be a stickler serves no constructive purpose except to irritate the neighbor, and is a game that two can play at. I’m sure everyone breaks some regulation or rule at some point.
Besides: would you rather have an owner who is having a financial hard time rent out a few rooms, or have a foreclosed home sitting in limbo next door?
This country needs a bit more anarchy and fewer busybodies in order to run smoothly.