@Jeff Marciniak from the sound of the initial post, I would probably either sign a six month lease to get through the winter, or I would move on from this tenant.

He was not fully aware of what his wife was doing when they signed the original lease, but I reviewed the lease and both he and his wife signed it.2.He stated that he was military and that there are stipulations other than receiving new orders to a new base that allow him to break the lease, he gave TDY as an example.

Unless there is something specified in the contract/agreement you signed with the property management company, that money is yours/your responsibility. 

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I'm wondering the best way to handle applications and collection of application fees, as well as selecting the most qualified tenant.

We are currently waiting for TOPAs to be signed, which has been going on for almost a month.

This is when I regretted not having a signed agreement between John and I. 

Some obvious things are of course obvious enough even for me to see without having a giant red sign with blinking lights on it.

Websites like Bigger Pockets make it look easy because of selection bias.

But you just signed for 55 k. ?