So you're essentially saying the roofer has no negative consequences for his bad, the city inspector doesn't have an negative consequences...and you have to pay someone to fix this issue?

Both apartments are currently rented, would this be an issue in the future to get tenants?

If I am the only member in the LLC, would that qualify for a 1031, or will I run into legal entity issues?

@Mai Nguyen, no legal issue, it probably does not make sense to do. 1.

A referee deed will be issued and the most debts on the property will be wiped out.

Yes getting a report from the plumber would be ideal; however, I believe your issue will be no one knew that an open window would cause the pipes to explode. had you given them a notification the first time when it happened then you could say "Hey I explained to you this would happen" or have it written in the lease agreement.

If you didn’t steal her equity the easy out for you might be to just refi before it becomes a legal issue.

I bought a house last year after inspection A general Inspection report showed everything is ok with the plumbing. nothing came up. last month I had some warer backout issue coming up from the bath in the basement, ordered a plumber. 

I asked this specific question in this post and 2 accountants weighed in on the issue.

You will not hear from me about little maintenance issues.