First a little back story, my wife and I are currently renting from her mother, the house my wife grew up in, now we are in the process of buying our first house. She asked us before we leave to fix up anything that we may have damaged, that's fine no problem there. The problem that I have is that now is, from what I understood, is that she is basically saying we caused water damage to the faux wood floor in the kitchen near the sink. This flooring was installed (poorly) over the original tiles shortly after they bought the house in the late 90s-early 2000s.
My main concern is that I don't want to get stuck replacing/repairing an old floor that has had a lot of wear and tear in a kitchen area over a period of a decade or more. Is there a way I can be proactive in covering my butt in case she does take legal action against us?

Depending on how bad it is... it can be legitimately argued its normal wear and tear over 20ish years. Especially if it's a plastic/linoleum type flooring.

I used top quality flooring when I remodeled my kitchen after I bought my house 20 years ago (yes I did everything and I know what went into everything). It needed replaced as it was showing wear barely more than 10 years later without any accidents or abuse. What I have now is holding up better but even it won't last forever.

The wife and I went through last night and looked all we could find was a couple of spots where the planks were slightly bowed up, and some chipping on the high spots

Well you know this is an in law problem, and the mother of your wife. How well do you value good relations within the family ? When renting anything, apt. house whatever, as soon as I moved in I took A LOT OF PICTURES. Nothing could come back at me, and a lot of pics before I moved out.

If this is engineered hardwood, can you not just lift and replace what is not acceptable ?

Well you know this is an in law problem, and the mother of your wife. How well do you value good relations within the family ? When renting anything, apt. house whatever, as soon as I moved in I took A LOT OF PICTURES. Nothing could come back at me, and a lot of pics before I moved out.

If this is engineered hardwood, can you not just lift and replace what is not acceptable ?

My in laws don't talk to me, so keeping peace would be something I'd only do for my wife. As far as I know it's laminate wood flooring from long ago.

It always helps to get an estimate (in writing) or two from a good contractor,(s) and then you would know exactly what you are dealing with just in case she does make it an issue. Maybe an agreement can be made if you have pictures and estimates to back up your side of things, or at least a plan to mitigate any complaints.

Talk to your wife and see how badly she wants to keep the peace. If you do replace it it's laminate flooring, you can find great deals, very inexpensive. If you put it in yourself (very easy to do, it's an easy floor to install), it would probably only cost you a couple of hundred dollars, depending on the size of the kitchen and the quality of flooring your get. I've seen and bought laminate flooring for as low as $0.60 a square foot.

Should you have to replace a 20 year old floor? No. But this is your mother in law, and if the fix is cheap and easy, why not do it to keep the peace?

A lot (to my mind) depends on how good a deal you got on the rent. Assuming you did, I'd take half of what you saved each month and spend it on the repairs. Even 50/mo for 3 years is a lot.

Do a walk though with them, and have them sign off on everything.

If not, they can not make you pay for wear and tear that is normal.
They would have to prove that you did water damage and it was not their issue for non repair of leaking water.

Do a walk though with them, and have them sign off on everything.

If not, they can not make you pay for wear and tear that is normal.
They would have to prove that you did water damage and it was not their issue for non repair of leaking water.

The landlord (mother-in-law) lives out of town, but from what I heard she sent her sister over to inspect the house after we moved everything out, and were still in the process of cleaning, and making some repairs.

It also depends on what sort of agreement you and your MIL have. If it is in writing then she could take you to court, if it is a 'family agreement' chances are that if she took you to court it might be thrown out.

The problem comes down to expected wear and tear. My first question is, how much water did you get on there to cause the bowing? Could there be damage underneath?

You might want to approach your inlaws with a quote to fix the floor and a deal for partial compensation if you did the damage.