If he has a written lease agreement, he may have difficulty in proving they are licensees. Furthermore, if they have lease agreements, then he is not permitted to enter the property without the tenants' express permission.
If he has a written Licensee agreement or no verbal tenancy agreement then he he is a live-in landlord with unrestricted access to the property and does not have to register with the PRTB.
As regards the mortgage interest I will have to leave that to someone more familiar with the tax system but I believe he cannot claim the interest paid.