I believe you'd only pay tax on the gain in excess of $250,000, $500,000 if you're married.

If he's causing you to lose tenants, he is a liability. 

I see some underwriters just get complacent and lose sight of the big picture (if they ever saw it in the first place).

I would hate for you to lose a good deal just because you did not understand foreclosure and redemption.  

I just don't want to lose a tenant and then start construction and then try and perform the repair while attempting to relist.

If they don't support you or what you do you will probably lose.  

IF on the other hand, you lose a tenant at a low activity time of year (e.g. just before Christmas / New Year) and the unit needs some work before it can be re-rented, it is very easy for a fair bit of time to pass.For a multifamily, it is normal / common to have a house meter for the electrical (external lights, hallway lights, etc) and possibly a house gas meter (if there are common areas and depending on how the common areas are heated).

As time wears on I think the marketplaces are going to lose their luster.  

This is designed for CA to not lose track of your deferred gain so that if you ever recognize the gain they can get the associated tax from the time you owned there.  

Don't lose a lot of sleep over the caliber of the tenants.