I cannot sell because there was a break in and a lot of damage.

Best practices for security deposit deductions (damages)?

The other option is a water supply line, but that would typically resulting a steady leak and the damage would occur faster.Really think about what is above that space that could cause the issue.

It appears you are able to hold her responsible to cover damages and lost rent.

Very satisfied with the results, operations and and the ability for both manual and automatic shut off before a leak can cause damage.. 

In each category, note how much you are bothered or stressed on a 1 to 5 scale, with 1 = not bothered at all and 5 = stressed out: Pain Points Stress1 to 5 Pain Points Stress1 to 5 Unit turnover Exterior maintenance Advertising for available units Deferred capital expenditures Tenant screening rules Plumbing or electrical emergencies Tenant selection / discrimination rules Mortgage payments Documenting move-in conditions Bookkeeping and bill paying Documenting ongoing conditions Taxes and insurance premiums Dealing with tenant complaints Risk of late payments or non-payments Dealing with neighbor complaints Risk of property damage or vandalism Mold, termites and rodents Premises liability Interior maintenance Evicting tenants If your completed table has mostly 1s and 2s, then congratulations—you are a happy landlord!

I finally told her to forget it and relieved her from the 3k she owed me in damages and late rent.

. :) To answer your question about legitimacy - how do they get to $125k in damages?

For replacement canoes that got damaged by straight line winds.  

Imagine someone harassing your girlfriend, damaging your property, using or selling illicit drugs, dog biting you or your other tenants and creating a flea or noise issue, or any number of other potential issues.