Here is a link with info on occupancy - http://nycrgb.org/html/resources/hmc/sub3/art4.html
If a violation gets written, I believe it's generally against the registered property owner, ie: the coop, not the shareholder. I would suggest that you have a real estate attorney review the situations and advise you of a course of action. Any violation will have to be dealt with by the coop, and if you decide to revoke the unit owners proprietary leases, it runs into money quickly - lost maintenance, attorney fees, bad will. It could take many months or even years to collect from a lease revocation, ultimately most likely from the resale of the apartment.