Real Estate Law
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The answer to your question is actually specific to the house you are talking about. Every house has a Certificate of Occupancy (C of O) which states how many families can live there legally. If this house has a C of O which states it is a 1-family residence, then it is illegal for your neighbor to rent any part of it to anyone.
You say the house in question is a three bedroom home. If that's the case, and there is only one kitchen in the house, then it can only be a 1-family house, and your neighbor cannot legally take in a tenant.
Contact your Building Department at City Hall at 1700 West 162nd Street, Gardena, California, and advise them of the situation. They will investigate, and if there is an illegal rental going on, they will issue a citation to the owner, who will then have to appear in court.