Quote from @Jose Almonte: The standard around the country is for the tenant to pay utilities. 

In many places, a "standard" residential district zoning (e.g.

The DC area is one of the lowest cap rate markets in the country.In MoCo you'll generally need a 40-45% down payment currently to have your rent cover your PITI on a standard long term rental.

Then you give them a "take it or leave it" offer.One other bit of "home work" for you - how much will it really cost for you to repair the property if they move out, to market standards to get the $1150 in rent?

The other transaction, the seller was offering a standard BAC.

Normally, we hold all of our tenants to a higher standard but in your case your will need to play nice and give her what she is asking or find a way to meet in the middle. 

A "trust account" is just a standard bank account where you hold renter funds separate from your own money.I recommend two accounts: checking and savings.

When I confronted them, they defended their quote, stating that they go off the industry standard and a portion of the labor time is for "testing the system after repairs to ensure safety."

It’s a lower quality standard than most new construction homes.

I would use the standard realtor lease form in your area and then look up common extra conditions landlords are using now.