I'd be really surprised if any jurisdiction has a provision like that.

The area has a small college with a surprisingly large international student base and very close by busThis will be my first time with a student rental so I was wondering if anyone has any specific advice for this situation?

You didn't mention how much equity you have in the deal, if anything, but the fact that you are in arrears suggest it has negative cash flow which is also not a surprise in CA. 

Looking at comps for studios in that area seems $900 is the top end on majority of it.Since you are putting so little down the cash on cash isn't terrible, but also note that I would not be surprised if your reno costs are higher than you expect.  

I am surprised that is their only option and was wondering if there are any other options or products that folks on here have used.

I strongly believe in routine rent increases and my tenants are not surprised when they get them, but to be clear, I don’t have 120 Tenants that are asking for a reduced rent or I would be forced to re-evaluate my market conditions.

The property i mentioned is still in play though we did get some influence from a realtor over promising and also a relatively high appraisal report which was surprising as the comps don't add up,  this property is a bit unique in that it does have the second unit. 

I also would be surprised if it took more than $2k at most to finish.

The house is fantastic - management left me somewhat surprised.

Surprisingly that has been enough to service our tenants, as each household has only one or two occupants, mostly retired.When buying appliances, I always have a conversation with a trusted appliance repair person to gather ideas.