I do have some more time before the next closing date, so I should be able to better determine damages.

There's no reason you can't alter their lease to end sooner; at the very least you can say that you tried but you're legally bound to let the person live there until the lease expires.An offer to help them look for a new place may also go a long way to avoid a cash for keys/insurance claim due to damage scenario.  

Regardless of who's fault the damage is, as @Kevin Harrison said, it's going to be like getting blood from a stone getting them to pay.

A backup as a result of inadequate clogged or damage on their end might be covered by them.

I'm learning about contract assignments but not sure how this can work with the "original parties...remain obligated hereunder" clause.Also, Section 30, on Defaults, states that a defaulting Buyer may be liable for actual damages, and "will immediately pay the costs incurred for the title examination, Appraisal, survey, and the Broker's Fee in full"Arghhhhhh!!!!!

From my personal experience, their quality of customer service is pretty good, and it seems that the company gives their representatives adequate power to go beyond each user's expectations when the opportunity arises, whether that involves providing extra credit to use during cancellations, replacing items that were damaged or taken during a stay, etc.

s comment - you said your house is in Denton County - then you will need to file in the JP court for that district in Denton County, not Collin county.I have done the process once - it went pretty smoothly, got the tenant out same day as the court proceeding, renovated the ample damage they had done and had a new tenant in a week later.Good luck!

I have now educated them on this topic, but I hope the damage to them on this deal is not too great.

I want to preserve the deposit to cover future or unknown damages.

Nearly all homes in Palo Alto are in a "flood zone" with a risk of flooding, but for most the likelihood of a flood being deep enough to cause damage is very remote (not in 100 year flood zone).Whether anything can be economically done depends upon the type of flooding that may occur.