Buying property w/existing verbal month-to-month tenant

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On July 17 we submitted a contract to purchase a property w/10 day option period. Couldn't view property interior because of existing tenant until under contract. Viewed property, tenant told we were insurance agents. Contract not picked up by seller until July 26. On July 23 emailed our agent to request removal of tenant before closing (dated Aug 31). Email not noticed by realtor. Tenant is on verbal month-to-month for $350 for a 3/2. House desperately needs rehab.

Have rewritten addendum to put up additonal $4500 non-refundable earnest money to guarantee to seller we will buy house but seller won't sign addendum. We offered cash (house only selling for $35,000) and wanted an early August closing or as soon as tenant could be moved.
Seller has refused to attempt any tenant removal. We still want the house with stipulation (not in original contract but attempted through addendums) that tenant be moved to another of seller's houses (which was told as an option by their property manager which is their family).
Now seller getting lawyer accusing us of breach of contract for not closing on 31st.
We think they still want to sell and we definitely want to buy but not with tenant.

This will be our first investment property and are pursuing it to rehab and gain equity to purchase others.

Is there something strange on the seller's part or is this normal? How long of a process is it to attempt eviction and do we have legal ground to do so? Does seller have legal ground?

Any thoughts appreciated. Thanks!