Since then she became very angry and hostile, started sending me texts and emails saying nasty things and threatening to Sue me at the rental board. 

If they start harassing or threatening the lawncare provider, that might be an evitable offense.There is an easier solution that I have used.

Especially when the changes threaten to risk losing a good deal.

I've suggested she go in with a bit of threatening to go to court to collect those wrongfully assessed payments for 3x, per the Landlord Tenant Law.

If he threatens a lien, he has to testify that he completed the work to specification; lying would be perjury I believe.

With a month to month tenant you have the flexibility to make those changes, at least, but just threatening it might get the water use under control.

In a normal functioning non threatening landlord environment I concur with your thought process.. where I see some landlords step over dollars to pick up pennies though .. is they think rent should be 1k and let their unit sit for 3 months or longer... when they could have rented it for 900 or 950 day one. 

Better to focus on the CURRENT value of properties in nearby subdivisions that do not have foundation problems.Finally, I'll say foundation issues are not usually life threatening scenarios, so I don't see any moral issue here. 

The city threatens to seize your property if you don't correct the situation.

This is why you will hear landlords threaten judgments and court action against tenants and that will get them to pay up or move.