Okay, so it sounds like the attorney combined the 2 adjacent lots and 2 dwellings on one RE lot with 2 dwellings. Everything is deeded to the LLC.

No real income tax benefit to that... IMO, it just means if you want to sell the houses, you have to sell them both together...

They still ought to have a conversation with their insurance agent or company (if they haven't already) to make sure that the policies are correctly written, or to have them rewritten.

They don't necessarily have to undo what they did.... they just won't get the tax benefit that was anticipated....