New Landlord & Neighbors from Hell: Please advise

[Alan A.]

Hello BP,

TLDR: Unreasonable neighbors are harassing my tenants to the point where they no longer feel comfortable living there. They are trying to break our lease agreement because of this. Due to HOA regulations, doing so would cost me about $10k, as I would not be able to rent the unit again for about 9 months, and the rental income is paying my mother's mortgage.

I have recently acquired a rental through creatively financing my mother's bad situation.

The property:
My grandfather who was also living in the 2nd floor unit with my mom, and mentally ill brother, was entering hospice care at the time, and could no longer walk up/down the stairs. I agreed to pay my mom's down payment, and service her mortgage for a new home, in exchange for taking over the condo. I rehabbed the condo for about $8k, and am making about $450/month in cash flow after maintenance and mortgage on the new home. I plan to use the cash flow to subsidize my mom's retirement, as she is still working full-time and would like to retire soon. I spent my childhood in that condo.

The problem:
New neighbors have moved in downstairs, and have been complaining about EVERYTHING. Their complaints include noise from the floor above, stating they want the floors to be torn up and redone with superior soundproofing. They have also been complaining about the tenant's dog barking (it is a tiny little dog). They even complain about hearing toilets flush and cabinets closing. 

They have been harassing my tenants to the point where they now no longer feel comfortable or safe renting in my unit, and are moving to early terminate our lease agreement. I have executed the lease prior to transferring title, because condo rules state I cannot rent for first year of ownership. They have about 9 months left of their lease term. If they leave, I cannot rent again for 9 months, which will cost me about $10k to hold vacant. 

To make matters worse, the evil neighbors' daughter is a lawyer. She has pulled the public records on the unit and is now moving to take action against me for transferring title without association approval (we used a quit-claim deed within the family, I grew up in the unit). She wants to have my tenants evicted (who want to leave anyway because of their harassment), she wants me to redo the entire floor in the unit, among other unreasonable demands. From speaking with the neighbors personally, they want to move also and don't want to live in a condo. I've gathered from HOA members and my tenants that they are living there because the daughter doesn't want them to leave. I have also been told she doesn't want them to move yet because she wants to rent the unit after the 1 year restriction has passed.

My tenants are absolutely wonderful people and are not doing anything extraordinary to cause noise. Apparently, the association and other neighbors living in the condo have similar stories about these peoples' unrealistic expectations and complaints. Everyone around them, including the HOA volunteers, want the neighbors to move elsewhere. They have made the family living across from them in another building split up their 2 dogs because you are only supposed to have one dog. My tenants called the police on them once for banging on their door and making threats and mentioning they have a firearm because of a very minor leak, and then they lied to the HOA that they called the police themselves.

I don't know what my options are, as this is my first rental property.
Should my tenants decide to bail and stop paying rent, would I be able to pursue them to maintain their obligations to our rental agreement?
Would it be possible, under the circumstances, to get around the HOA rules of renting within 1 year of ownership, and only one 12-month lease allowed per year.
Can I go after the evil neighbors?
Will I eventually have to end up selling the unit to avoid 9 months of vacancy?

These people are absolutely unreasonable. I have tried speaking to them directly to try to reach a compromise, I have even spoken with their lawyer daughter. Their sense of entitlement and disregard for others is something that I've never encountered before. I am especially concerned because their lawyer daughter has gone through the lengths to pull public records on my unit and is making threats to take action against me and the HOA. I am convinced that if I am able to rent it again this year, that she will come after me for doing so.

I would overwhelmingly appreciate any seasoned landlords who might have had similar situations share their experience. Thank you in advance!