The answer to your question is that giving legal advice without a license is the unauthorized practice of law, whether there is a charge or not. Anyone doing this can be prosecuted. In addition, anyone doing this is liable to those to whom the unauthorized advice is given at the very least for any damages that occur as a result of the purported advice.
This answer is offered for informational purposes only. It is not offered as, and does not constitute, legal advice. Laws vary widely from state to state. You should rely only on the advice given to you during a personal consultation by a local attorney who is thoroughly familiar with state laws and the area of practice in which your concern lies.
There is a fine line between business and legal advice. In the State of Washington, we have an intergrated bar. This means that all matters regarding the practice of law are handled by the Washington State Bar Association. The WSBA is subject to control by the Washington State Supreme Court. All practicing attorneys are licensed by the WABA. Whether or not a person can charge for 'legal advice' depends on whether the WSBA considers it the unauthorized practice of law. You can check with the WSBA directly. I would assume that telling a tenant that they could reduce rent is probably not the practice of law, unless the tenant claims legal, not economic grounds. As to your tenant's question, you have to make a business decision as to whether you wish to allow for rent reduction. On the facts you state, there are no legal grounds to make rent concessions.