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.

After about 6 months in I found out It had a foundation crack because water was coming in through the basement (wasn’t mentioned in inspection report).

Keep in mind, City of Toledo has Water/Sewer/Trash on the bill.  

Check your state laws closely before making the wrong call and getting into hot water.

In my area, to consider a room as bedroom, you need to have closet, either built-in or standalone (some Cities prefer built-in only), should have a  HVAC vent, but no water heater and no electrical panel in the room.