You  could be in a law suit and have only a few days to find replacement financing.Do a search on LLCs here and see how many threads talk about successful law suits after moving personally financed properties with "due on sale" clauses to their LLC.

Even with lead free certification, there is still room for lawsuits because anyone can sue anyone for anything.  

If not and you're living by yourself, change to a roommate situation or something where you are renting someone's in-law suite or something that is cheaper.

Your lawsuit could be for your $4,000 + legal costs + opportunity costs as you would have done something with that property or something else with the money tied up waiting on the property.Your goal in this endeavor would be to obtain a pre-trial settlement that would at least get some of what you feel you lost back. 

I treat everyone as fair as possible, and hence zero issues with lawsuits. 

If I deny him simply because he is an ******* am I opening myself up to a lawsuit?

Many real estate law suits are caused by situations involving buyer early occupancy.  

If you have 2 properties in one LLC and you have a lawsuit, they can take both properties. 

@Shawn McCormick Thanks for the response, It is a 4/3 SFH with an in-law suite in the backyard, I would love to hear any and all recommendations!

This is why I don't partner with just anyone off the street, and if I do partner, there are provisions made to avoid this issue up front because eventually partnerships get to this point.Unless he agrees or you buy him out, you can't walk away with the company name, strategy and operation from another owner, if you just bail and go out doing the same thing, well, that's what starts law suits.