There are some complex structures to mitigate that for sure where the owner might hold assets in a blind trust with no control but you are a one man show and that won't ever pass the smell test to a judge.Asset protection is all about risk tolerance.

The only way I know how to mitigate the risk and avoid mistakes is know my market, in person. 

We just received our inspection report back and it has 11 critical points that we need to address and either abate or mitigate it also has dozens of spots that tested positive but no current action is required.

If they claim they never obtained it, they can claim twice the amount of the deposit against me in court.So short of obtaining a scanner to take with me to appointments or bringing duplicate copies to fill out and sign, how would you suggest I mitigate this risk?

California isn't the problem here.OP will want to consider his IRC Sec 121 exclusion, and all capitalization to basis over the years to mitigate the tax exposure.To everyone suggesting an IRC Sec 1031 exchange: You can't 1031 business rental real estate into a personal residence.... 

Agree with @Thomas S. and @Joe Villeneuve :  Extracting the equity to redeploy into either a new asset class or a diversifying RE income stream would mitigate the risk of that equity evaporating due to market conditions. 

You will need to do Due Diligence on the commercial tenants, review the leases and try and strengthen them to mitigate the risk.

Mostly for the risk mitigation, and I've never wanted to do that much work on my properties.

There's several ways that 1031s can benefit you throughout your life.Yep death is the great tax mitigator. 

What your landlord is doing is mitigating his liability.