I've only been doing this a little over a year and have already learned this hard lesson twice (and it wasn't due to negligence on my part, but just the natural course of being in this business). 

The fire wasn't started by you or by anything you did negligently so you aren't responsible to them for anything.

my written criteria for tenant screening clearly states double deposit required if no rental history, and friends & family history is negligible.

I'm not too concerned if there are multiple unit owners with the same problem who will be sharing that cost, but I do feel it's BS that I have to pay it.The building has known about the problem of water entering for years, which they recently solved (hopefully), but proving negligence of maintenance and repair sounds like more trouble than it's worth.

The tenant shall promptly repair at his own expense any damage to the property which may occur by reason of his own negligence or the negligence of a member of his family, invitees and guests.

Well the difference between the advertised square footage, and what those numbers the appraiser adds up to is negligible.  

He might even be allowed up to 3x that amount because of your negligence!

You can have all of the benefits of Trevor's viewpoint without assuming all of the risk.An LLC is litigation protection from suits not covered by insurance (any alleged intentional fraud, gross negligence, health code violation, etc.)You want an LLC to hold the assets separate from yourself or the operations of the company.

Non-recourse also has carve-outs typically, so if you do something fraudulent or negligent, you could lose your non-recourse status.Mark

A thorough response as always.I have my own take, and as any attorney will say, this is not legal advice...For the asset protection purposes you need both (1) insurance and (2) properly structured company for litigation protection, an LLC/LP/etc.Insurance protects your from nuisance that occur on the property; i.e. slip and fallThe company structure protects your assets from litigation liability; i.e. gross negligence (health and safety, alleged known hazards, fraud in the sale of the property) as well as someone getting to your assets by suing you personally (e.x. you got into a car wreck that exceeded the coverage of your policy, now they can go after your assets)The due on sale clause is often a concern, but me and my colleagues view it as a very low risk for a number of reasons.