Just closed today renters report bed bugs same day non disclosure

[Daniel Haggar]

New member here and need some advice. I just closed on a 5 unit apartment complex today. The property contains 4 units in the main building (where the problem is) and an out-building (no problem there). All units are simple ~420 sqft efficiency studios in Brighton, CO.

Upon meeting with tenants right after closing I was informed of a bedbug infestation. One of the tenants has a homeless brother who crashes there and that is the theory (fact) for origin of the bugs. The problem was reported to previous landlord back in AUG and they came in a sprayed for the bugs a couple times. Problem didnt go away. Landlord got unresponsive on the issue after tenants continued to complain. Seller AND REALTOR knew of the problem (tenants complained during listing process) and it was not disclosed in the contract.

The selling broker (owner/broker) responded saying that the thought it was resolved. BS. They are also offering to "take care" of the problem as we are threatening legal action and potential for losing broker license. I contacted some mitigation companies today and it looks like $3-4K to have a "ambient" treatment performed where they heat all units to 130+ degrees for 5 hours and then spray with chemicals. 

What is the best way to handle this? Lawyers? contracts/formal agreements? Have the seller cover the ambient treatment and call it good (after eradicating the "source" of the problem)? Any expert opinions are greatly appreciated. Thanks.