Is it ok to run a 30A water heater circuit on #12 wire?
The installer's language sounds like the standard platitudes they give people to get them to drop the subject.   

You can't put a 30A breaker on a 12 AWG feeder cable, except for certain very arcane motor applications where the data plates from the numbers support it.  


There is a new type of water heater which is basically an electric motor.  This is a heat pump type water heater, which is now mandatory for large tanks above (55?) gallons, and optional at lower sizes.  
Gas dryers take very little power, and will be happy as a clam on 12 AWG wire; however they are not eligible for the special motor rule, which means the breaker on 12 AWG wire must be 15A or 20A.  


But still, the installation must be done in accordance with the unit's instructions, NEC 110.3(b), and that definitely includes exact breaker size and minimum wire size. 

By minimum, I mean if the book calls out 14 AWG, you're allowed to use the larger 12 AWG.  That's always OK. But if the unit calls out a 15A breaker, then you must use that even if you've upsized the wire to 500 kcmil. 

I would share your concerns with the landlord.  If the old cable is readily accessible, it's not expensive to change it, and 30A / 10 AWG is the de facto standard for whole house water heaters. 

If the landlord is a jerk about it, call the AHJ (Authority Having Jurisdiction) and warn them of the improper installation. However, expect backlash if you do. 

The only thing that would give me pause is if this is an old FPE or Zinsco panel. In that case, your option for a new breaker is a Connecticut, and they're even worse than the breakers which got these panels condemned in the first place.  If it's a Challenger panel, Challenger breakers are bad news, but the panel is fine, and Eaton BR/C breakers are actually  listed for the panel.