It’s always good advice to hire an attorney (or make a title insurance claim, if applicable) when you find yourself in a giant mess.Get a copy of the title report, post it here, and perhaps some of us can point you in the right direction.

This new requirement simply means that you can't can't use an applicants source of income as a disqualifier.

Applicants are often living with friends or family, so are often able to move in mid-month, as soon as the unit is ready.

In a soft rental market or low income housing it is better to try to get as many applications to choose from as you can.

Since you are new, you have to decide what criteria you will use to determine if an applicant is acceptable.

If you were using these guys, they wouldn't be checking your applicants, either.  

They will screen you before sending you applications.  

@Max Tanenbaum initially it was for application fees.

You could make your qualifications harder for applicants and hopefully a more qualified tenant will be a little more responsible with the carpet and their animal. 

On flips, generally, costs are capitalized to an Inventory account and backed out as COGS when you sell the property.On rentals, costs are either expensed or capitalized depending on the applicability of the Tangible Property Regs and your placed in service date.