I am not saying you let him get away with flooding the units beneath him but I am saying to demonstrate compassion in whatever actions you take.It is a tough situation. 

@Jung-Jin Shim, a few things to keep in mind. 1.

Many homes in Chino have wells as the aquifer is right beneath them. 

The two directly beneath it are "how to make an offer and negotiate" and "First time working with a wholesaler...."

If you forgot a plastic shim can be forced in, to help peal it out.4.

Can you shim it and seal it with an expansive caulk?

Also, there is no visible mold and no mold smell in the basement (there is a little on the caulking beneath a single pane picture window upstairs which I'll deal with).That didn't sit too well with the tenants as they have been looking online and finding information about how dangerous it might be, and it didn't help that the first report that I had done the inspector attached a boilerplate message recommending a full HVAC cleaning (ducting is 1 year old) HEPA vacuum, air scrubbers, double washing everything in the unit with bleach, etc. so now the tenants are being fairly combative and insisting that more needs to be done.

If this was installed correctly the moisture would not have gone all the way beneath the flooring...and the varnish will seal it anyway.

Dig beneath the surface-the MLS etc.

the way section 8 works is different in every county across the US and I have been diving into the matter myself for an 8 unit I am considering putting into section 8 in St petersburg Florida.. but from my understanding you would ask whatever rent you are hoping to recieve and the tenant will tell you what their TTP or total tenant payment is and the county is responsible for covering the remainder of the lease as long as it is beneath their FMR fair market rent.