The contractor estimate for the cost to repair the damage is approximately 93k.

Perhaps my son being one of the tenants will help to mitigate the damage?

This can help mitigate potential damages down the road. 

In addition, habitual late payments over the grace period can result in eviction which is very damaging and expensive.Bi-weekly rent is $225/biweekly period = $5859/year

Insurance will cover damage to their possessions, but you are talking about inability to use the apartment, not their possessions.Lack of water/sewer service means the apartment is uninhabitable.

@Carl W., first off you never state who should be paying for the damage? 

Mind you; there are no physical damage to the garage door itself.

Their choices are: 1) Take you to court, which if they didn't follow their own management contract, won't work out for them.2) Try to put a lien on your property, which you could sue them for damages and attorney fees.They sound very incompetent if they did work without your approval AND without upfront funds from you.

The damage by the outgoing tenant was not that extensive to warrant all the upgrades.

I am looking at a house that has suffered a lot of damage post foreclosure.