Even if you did not add endorsements for service line or sewer system replacement if the damage is part of a covered peril it's possible your insurance will cover some or all of it.What were the communications at sale regarding the water problem?

Having documents confirming communication with several lenders and refusal of a loan, you have grounds for returning the deposit.

It is not impossible, but building a team that can communicate effectively is going to be key to getting this one done.Good luck!

What @Chris Seveney said.As soon as they make these kinds of accusations, inform them that henceforth all communications will need to be through your attorney. 

I think it's good they are communicating.

Also would consider getting a POA from the seller for their loan so you can communicate make payments on it.

Instead of denying them, can we refer them directly over to the owner for them to sign a lease with the owner who is willing to effectively manage the contract, payment and relationship BUT would still want to retain us (albeit for a lower fee) to deliver ONLY guest and property care activities (guest communications, organizing cleaning, lawn and pool care etc). 

If she was communicating with me, then she wont be out on the streets.

Make sure you have all your communication.

Money --and the lack of communication around money-- is the largest cause of divorce.