In our area it is not unusual for tenants to pay 40-50% of their income toward rent.

It would also be unusual for a title company to open escrow without an executed sales contract.

Not terribly unusual.

@Michael Giaquinto it seems highly unusual there wouldn't be any rental comps. 

I'm good with people and like to handle the unusual deals with tenant or owner problems that need to be ironed out.

It's not unusual to make (or save) them several percentage points by going above and beyond in a transaction.

Then, next time, you will not have to have the conversation - simply refer to that provision in the lease and reiterate that is what the policy is.Unless the ceilings are unusually high, they should be able to figure this kind of thing out so you can move on with your life.

A title search would not reveal a Raze or Repair Order, In WI it would be unusual for them to be recorded.

From your description it sounds like this was mechanical failure or perhaps a faulty installation issue with the water meter and it resulted in an unusually high water bill. 

Not saying all PMs are bad news, just saying it's not unusual - at all - to have found you hired a bad apple.