The neighbor is an idiot for many other reasons than this -- and yes she was found at fault thus why we got the $500 back and it was not ruled an accident or faulty water heater. She simply did not follow the condo policy of replacing your water heater at about 10 years -- the condo was over ten years old and the water heater was never replaced so it was deemed negligance on her part.
Also her water heater was in the attic - her condo had two floors plus the attic so the water had to come rushing down the next level where the bedrooms are and then to her lower level where the living/dining and kitchen are. So yes there are smoke detectors on all floors so if what you say is true then at least one level of her smoke detectors should have gone off as she had two floors of flood before it could even hit ours.
And I never called the other neighbor an idiot for the toliet leak -we simply knocked on his door and he took care of it.
She didn't even know what to do when I rang her door bell - she actually got mad at me for waking her and then I had to explain what she needed to do -- this a woman about 20 years older than me who had previously owned a single family home.
But it was more prior experience living below her that caused the idiot/crazy remark -- this just was the nail in the coffin as they say.