One recent case where an exchange was denied the property had been held for 12 years but the intent to hold had never been established to the tax court's satisfaction.  

It's the ones you deny that will get you in serious legal trouble. 

Long story short, he didn't deny the eviction, explained his situation at the time, I told him that with an eviction it's very unlikely that I will rent to him but if I think of a scenario that I feel comfortable renting to him with conditions I will let him know.

An illegal eviction occurs when a landlord illegally denies a tenant access to the rental unit or a tenant’s property is removed without a court order and the removal: Is not the result of abandonment and/or is not the exercise of a landlord’s lien.

What it boils down to is this: A service animal (not a service pet because these animals are NOT pets) cannot be denied if they are prescribed by a physician to help with a disability.

Am I allowed to deny it?

Denying it to maintain your insurance should be reasonable enough. 

Is there a chance these permits are denied , even when I take care of all maintenance needs that come up from both tenants and inspections?

So, since you have no evidence of anything wrong you wouldn't deny anyone!

Without the net lease, the IRS still has the ability to argue that the tenants in common are engaged in a trade or business, denying them the ability to elect out of partnership tax treatment.Although partnership interests do not qualify as like-kind property under the rules of IRC Sec. 1031, partnerships can make like-kind exchanges of their qualifying assets.