And, while that might have been worth discussing had they approached you as "adults," they chose to financially harm you. 

If it is harmful you need to remediate. 

Okay if you want to file a lawsuit in America you have to prove adequate psychological, physical, or financial harm was done to you.

In a nutshell, I came here with a technical question which involves balancing his moving out and my finding a new tenant, hoping to find the answer to guide me so I don't screw him, and not harm my business at the same time.

----Many times, when you think you're helping people, you're really enabling an unsustainable lifestyle, and enabling them usually does more harm than good over the long run.

No harm no foul.

@Art Maydan 1). from an insurance perspective, you could be held liable if a tenant is harmed because of non working life safety equipment.  

L&I deemed the place unfit to live because of the damages, we escaped the inferno without any bodily harm and went to stay with my daughter until we found suitable housing.

@Sonia Spangenberg If the city is giving you issues, you could ask them if you gave them an environmental report showing that the land is safe and added septics is doable and won't harm the water table that might get them to calm down. 

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