I like the idea of pedestal sink to add feel of more space and prevent water damage. 

We live in San Diego, so we're open to anywhere that has warm water and sand.

Large mutli-family owners would be wise to require insurance as a water issue in one unit can damage another. 

Utility companies normally let tenants get pretty far behind before the landlord is notified- if the utility company puts a lien on the property for unpaid bills, it is better to have closer control over the bills- If there is a water leak or other problem with the property, the tenant doesn't have to bear the costDisadvantages of having utilties in owner names:- If tenants start using a lot more water/power, it is more difficult to quickly adjust rent or get them to conserve- with pandemic or other freezes on rent or evictions, there is no recourse for utility increases- if the tenant qualifies for low income utility pricing, it has to be in their nameOnce you decide what your guiding principle is, you can align your current rental agreement to match.

Telling the residents how to turn off the water supply valve is the easiest solution and the rest can be solved later. 

What about HVAC, kitchen, water heater, etc? 

Don't forget water.

A leak is coming from somewhere above our unit in to the kitchen and trying to determine who would be responsible if the water comes from another unit?

Option 2 have them pay water and sewer.

Note water leak causing the damage has been stopped.