This may very well be the first story of many of why they can't pay their rent on time - bank issue, health issue, pet issue, etc, etc, etc. 

Kitchen Cabinets with fist sized holes, an overflowing AC drain that went unreported for lord knows how long, causing standing water & mold growth along the entire back half of the house (hence the water issue), and we found a nice pit bull puppy (no pet policy) that conveniently ate carpet + pad, chewed window casings and doors in EVERY room.

That is like taking your pet hamster to the veterinarian to get surgery .

I did click vinyl in one unit and it’s still great in year 7 but last 3 years it’s all reinforced friction fit (or glued, The point is not click-lock). ... and that’s all in pet friendly (including dogs) units.

If it is a deposit towards a cost (for instance a pet deposit that you will use to replace flooring when the tenant moves out) I wouldn't calculate this as income.

Also, the lease says 'no pets' and they have a cat that they tried to hide. 

I have a couple SF units as well and went with wood laminate in those (I allow most pets in these units).

I have a no pets policy but I'm sure the day is coming when a tenant will appear with a emotional support pony or some such....We are in NH and I seem to remember that, if a rental is a primary residence, the owner has some additional flexibility in the law.Thanks for your insight.Signed - Landlord newbie

When I rented to them they asked about getting a dog and I made it clear I would not allow pets. 

I looked at their lease which ends in six months, and the lease states "No pets".