I recently looked at a place with major water damage (what I'd call major).

As soon as I and renewed the lease the tenant wrote me this long message with all these thing wrong, including drain smells bad(she’s been putting bleach down the drain to kill the odor, the lights in the kitchen and bedroom are flickering(this ones easily fixable) & the bathroom floor is in-caving because of water damage(she suggested a new shower door).

If so, you should be taking steps to get reimbursed for the damage.

Both houses are toast, and one of our other homes next door sustained a heavy amount of fire damage as well.

We remove any boards that are severely degraded by water or termite damage. 

When they picked it up, there was no chance they could claim damage due to rain or anything like that.

Do I seek damages against the tenant (which may be almost impossible), or the insurance company?

I hope they don't damage the property.What is the neighborhood?

Although I was of the impression there was no such thing as a damage deposit in Ontario so maybe you mean last months rent?

Can anyone suggest a good local water damage mitigation contractor, and/or someone that can replace and install new drywall?