There are many out there and basically they are waterproof vinyl planks that look just like hardwood flooring but are water proof and are able to withstand abuse from Tenant and pets with ease...

If your realtor has been incompetent, dishonest, or abusive (all which I have encountered myself), it still is not permissible; there are professional standards of cooperation that torment all of us when dealing with those who can be challenging. 

What happens when the place gets gutted, materials are purchased and your contractor/borrower gets hit by a bus, or goes bankrupt from other projects, or God says this isn't going to fly?

Dayton has a ton of crime and drug abuse.

Nowhere in your contract with KW does it say you have to put up with abuse. 

How do you know that they don't abuse the trust between the two of you with this system?

In other words, I'm not aware of a definitive prohibition against it, but am aware of various theories on why it could be considered abusive y the IRS.

They can only hold you liable if there's evidence of abuse or neglect.But, read your lease to see if you agreed to something different.

You've met the legal requirement by attempting to return funds and the tenant abused it.File with the police.

@Robert Shedden be very careful on scamming - working in a bank we see cashapp abused a LOT.