Is this a hypothetical, or are you asking because you are in this situation?
In the situation you describe, I’d say it’s an OC responsibility, but I’d be making an insurance claim if the issue is caused by a split copper pipe. We made a successful insurance claim for that same scenario. Turned out to be a bit less-than-successful though as we now struggle to get anyone to insure us.
The insurance issue aside, OCs need to be making provision for building repairs, and repairs that involve water always seem to have a lot of damage. But the owner also needs to be fair. If the original bathroom was somewhat basic, with laminate cabinetry and painted walls, then the owner can’t demand stone bench tops and full tiling. The insurer will only pay out to replace to the same standard and that should be the OCs position too. The owner should pay to “top up” if they want to take the opportunity for an upgrade with additional lighting, spa bath, tiles to ceiling etc.