There was a judgment about some BC buyer who didn't close and they owed 350k in damages.

This is usually effective but can be difficult in certain markets.

Not looking so much for damage to the rentals, but to cover injuries should someone get hurt on the property.

What strategies have you found to be most effective in fairly splitting utility costs among tenants?

The most common benefits a landlord can get from an arbitrage agreement are: reduced vacancy expense, decreased maintenance costs (most arbitragers agree to fix any damage done by guests), increased rent (most pay a premium), reduced number of hours managing the property (aka it's more passive)Some less common benefits, but still worth mentioning: Using the property to host their own guests at a lower rate during the "vacation season", Revenue sharing, arbitrage managing landscaping, and other management tasks. 

This direct approach made their efforts more effective.

Understand the contracts you sign and how each detail of the investment can be effected in each scenario.

There is no charring or damage to structure, just smoke discoloring as far as I can tell. 

Many lenders generally have a 1-year lookback window where things will change as soon as its been 12 full months without a mortgage late (then will essentially no longer be a penalty besides any effect on FICO score)

But, if repairs come up and they don't have the money to fix them, if they put a bad tenant in that does a lot of damage, or in general, if the neighborhood starts deteriorating, it could turn into a bad investment.These are all things to think about with any real estate investment.