A strange set of events in deed, not something that occurs often but it happens none the less.

If the contractor is due At Least the money due as each draw occurs, no problem with signing the check over to them.....in that case only.Preferably, you have a contract with draws where the draw amount from the insurance company Matches the draw amount you are paying the contractor.  

For any commercial properties, I order a Phase One environmental report, which summarizes what has occurred on the property. 

Certainly, don't accept any payment before you get to court, but I can't see the harm in responding.

They declared bankruptcy, yet that shouldn't harm the condos much as the association doesn't really have to rely on credit. 

So my reason for concern about the property is because its a college student rental and i would hate to have some accident occur on the property and i am responsible for it.

The renovation costs may include a contingency reserve and renovation-related costs.Contingency Reserves: Contingency reserves 10 % required for any unforeseen cost overruns that may occur during construction.Unused contingency reserves that were financed into the loan will be applied to the principal balance of the loan.

Should this occur than the grounding wires should be secured to a ground bar, separate from the grounded (white) conductors.

Plus, if the profit of your other properties can float that cost + the maintenance for 7 years, then what is the true harm?

This might be another avenue to pursue (especially since the discussion of it being a SERVICE pet, specifically, didn't occur until after you denied her first request).